https://starfieldsmith.com/wp-content/uploads/2026/06/8d9528c0-8b39-40cc-accc-2468b4551ad3.mp3 One of the benchmarks of the SBA loan program is that SBA loans are made to operating small businesses and not passive entities. If a small business enters into a Management Agreement with a third party to assist with running its business, it presents a grey area for Lenders as to whether the business ... Read More

https://starfieldsmith.com/wp-content/uploads/2026/06/b1e013c9-2de1-40e5-9b30-3fb8b5db1cc5.mp3 On May 28, 2026, the Small Business Administration (“SBA”) issued Policy Notice 5000-879464, Prior Loss Rule: Non-Controlling Ownership Update (the “Notice”), which provided guidance for SBA eligibility questions related to prior losses on SBA loans involving non-controlling minority investors. The Notice applies to all SBA 7(a) and 504 loans approved by SBA on or ... Read More

https://starfieldsmith.com/wp-content/uploads/2026/05/644a1b4c-1cf8-4e35-b363-456d3c0ce7c8.mp3 While the SBA’s Eligible Passive Company (“EPC”) guidelines are well established, lenders continue to encounter SBA compliance issues that may threaten the SBA guaranty. The EPC rule is a limited exception to SBA regulations prohibiting financing for passive businesses and passive investments. Under SOP 50 10 8, an EPC may generally use loan proceeds ... Read More

https://starfieldsmith.com/wp-content/uploads/2026/05/7ae44a8e-796a-46d9-8d7f-5268e1d61b39.mp3 Following its “do what you do” policy era, the U.S. Small Business Administration (SBA) has issued various procedural notices, underwriting updates, and eligibility revisions in the past few months, re-establishing certain prudent lending standards and revising applicant eligibility for SBA loan programs. As lenders, borrowers, and other key partners adjust to the recent changes, ... Read More

https://starfieldsmith.com/wp-content/uploads/2026/05/43c68f28-3099-48e3-b0c9-3e66a5f6ff1d.mp3 Obtaining a U.S. Small Business Administration (SBA) loan is one of the most consequential financial decisions a business owner will make. Whether acquiring a business, purchasing commercial real estate, undertaking a construction project, or securing working capital, SBA guaranteed loans involve complex documentation, strict regulatory requirements, and significant long-term obligations. Yet many borrowers try ... Read More

https://starfieldsmith.com/wp-content/uploads/2026/05/973c961a-9b14-4468-b399-e5679f6c7187.mp3 The updated SOP 50 10 8 (“SOP”) has replaced the long-standing “do what you do” flexibility with stricter underwriting expectations, making insurance a more critical component of the lender’s credit decision. Under the standard of prudent lending, banks are expected to evaluate whether the insurance policy aligns with industry standards based on the property ... Read More