Best Practices: Updates to Equity Injection Guidelines
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
Best Practices: Say Goodbye to the Franchise Directory
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
Best Practices: Reviewing Management Agreements Under the New Rules
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
Best Practices: The Affiliation Rule Change
The cornerstone of SBA lending has always been and will continue to be reaching businesses that are, in fact, small. The way that small business is defined has shifted drastically under Procedural Notice 5000-846607 “Implementation of the Final Rule on Affiliation and Lending Criteria for the SBA Business Loan Programs,” which is in effect now, ... Read More
Best Practices: Do What You Do
“Prudence is a presumption of the future, contracted from the experience of time past.” – Thomas Hobbes SOP 50 10 7 didn’t introduce the concept of SBA requirements being rooted in policies for similarly-sized, non-SBA guaranteed commercial loans, but it certainly expands and more heavily relies upon its use. A standard that SBA internally refers ... Read More
Best Practices: SOP 50 10 7 – “All That Glitters Is Not Gold”
This famous line from Shakespeare’s Merchant of Venice seems an odd way to begin an article on SBA lending. Nevertheless, SBA released the long-awaited SOP 50 10 7 (“SOP”) on May 10, 2023. Like the Affiliation Rule and SBLC Rule, which became effective on May 11 and 12, respectively, the SOP brings wholesale changes to ... Read More