Articles

https://starfieldsmith.com/wp-content/uploads/2023/07/d7183016-f7a6-4bfa-bdfa-42c14f92e6f3.mp3 On May 9, 2023, the SBA issued Procedural Notice 5000-846607 (“SBA Notice”) which addresses the implementation of SBA’s Final Rule on Affiliation and Lending Criteria for the SBA Business Loan Programs effective May 11, 2023 (88 FR 21074) (“New Rules”).  The SBA Notice revises the guidelines in the SOP 50 10 6 pertaining to ... Read More

https://starfieldsmith.com/wp-content/uploads/2023/06/77149cdd-e606-40bf-ad66-5a280cf3221d.mp3 Collateral requirements for Standard 7(a) Loans (those greater than $500,00) and 7(a) Small Loans (those under $500,000) will be updated under the new SOP. For 7(a) Small Loans, the collateral requirements were largely already based on the “do what you do,” concept prior to issuance of the new rules. Two significant changes in the ... Read More

https://starfieldsmith.com/wp-content/uploads/2023/06/ee50fc56-96bd-4aa0-90d0-6e4b4b899732.mp3 One of SBA’s core requirements for all 7(a) and 504 loans is to verify and document the unavailability of credit on reasonable terms from non-federal, non-state, and non-local government sources, thereby necessitating the need for SBA-guaranteed financing.  See 15 USC 636(a)(1)(A) and 13 CFR § 120.101.  SBA’s SOP 50 10 7 (“SOP”), effective August ... Read More

https://starfieldsmith.com/wp-content/uploads/2023/06/99220fca-82e8-4eec-ae94-099a9da6b368.mp3 On May 9, 2023, the SBA issued Procedural Notice 5000-846607 (“SBA Notice”) that revised the guidelines in the SOP 50 10 6 pertaining to equity injection requirements. These changes are also reflected in the SOP 50 10 7, which will go into effect August 1, 2023. The SBA Notice removed the requirement that certain ... Read More

https://starfieldsmith.com/wp-content/uploads/2023/06/Best-Practices-Say-Goodbye-to-the-Franchise-Directory.mp3 As we have discussed over our last few articles, the recent rule changes issued on April 10, 2023 altered the affiliation rules to limit the analysis to issues of common ownership and eliminate the need for lenders to consider matters of control when determining affiliates of a small business applicant. As a part of ... Read More

https://starfieldsmith.com/wp-content/uploads/2023/06/best-practices-reviewing-management-agreements.f13ba74b-d20c-40d0-b78c-a482d01de761-1-1.mp3 Last week in our article, Best Practices: The Affiliation Rule Change, we discussed how lenders are no longer required to review matters of control when performing an affiliation analysis, and that affiliates are determined primarily through common ownership. As a part of this change, SBA removed provisions stating that management agreements must be reviewed ... Read More