SBA Policy Notice 5000-870260

SBA Policy Notice 5000-870260

Effective 2025-10-01 · publisher's stamp for this provision

SBA Procedural Notice TO: All SBA Employees and 7(a) Lenders CONTROL NO.: 5000-870260 SUBJECT: 7(a) Manufacturers' Access to Revolving Credit (MARC loans) EFFECTIVE: September 4, 2025 The purpose of this notice is to supplement SOP 50 10 8 with procedures facilitating access to revolving credit for manufacturers. Loans made under these procedures are available only to eligible small businesses that meet the eligibility requirements in SOP 50 10 8, Section A, and are engaged in manufacturing (NAICS sectors 31-33, where 31, 32, or 33 are the first two digits of the business’s 6-digit NAICS code). These loans will be referred to as 7(a) Manufacturers’ Access to Revolving Credit (MARC) loans. MARC loans are a new 7(a) loan delivery method, not a modification to the existing 7(a) Working Capital CAPLines or SBA Express delivery methods in SOP 50 10 8, Section B, Chs. 2 and 3, which remain in effect. MARC loans are available effective October 1, 2025. MARC loans contain features of both Standard 7(a) term and SBA Express revolving loans. MARC loans may be term or revolving. They are underwritten like a Standard 7(a) loan, and the monitoring requirements are similar to those of SBA Express loans. For revolving loans, the Lender must conduct an annual review of the borrower's financials. If the results of the annual review are unsatisfactory, the line must be converted to a fully amortizing term loan with a zero balance at loan maturity. Once the loan has been converted to a term loan, the Lender may not make further disbursements on the line. Fees: In addition to the fees in SOP 50 10 8, Ch. 4, Para. C.2., at the time of the annual review, the Lender may charge up to 50 basis points calculated based on the maximum loan amount. Lenders may treat MARC loans as an asset-based line (e.g. similar to the 7(a) Working Capital CAPLines program or based on the Lender’s policies for its similarly-sized non-SBA guaranteed asset-based lines). In this case, the Lender may charge an extraordinary servicing fee not to exceed 2% of the annual outstanding balance or the servicing fee that the Lender charges on its similarly-sized, non-SBA guaranteed asset-based loans, whichever is less. However, the Lender may only charge either an extraordinary service fee or 50 basis points calculated on the PAGE 1 of 2 EXPIRES: 9/1/26 SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete Must be accompanied by SBA Form 58 Federal Recycling Program Printed on Recycled Paper maximum loan amount, not both. Lenders may not charge extraordinary servicing fees or the 50 basis points on lines that are term or that have been termed out. Except as stated otherwise in the Appendix 13, all 7(a) Loan Program Requirements, and in particular, SOPs 50 56, “Lender Participation Requirements,” 50 10, “Lender and Development Company Loan Programs,” and 50 57, “7(a) Loan Servicing and Liquidation,” and the Servicing and Liquidation Actions 7(a) Lender Matrix apply to 7(a) MARC loans. 7(a) MARC loan terms include but are not limited to: Maximum loan amount: $5,000,000. Maximum guaranty percentage: 85% for loans $150,000 or less; 75% for loans greater than $150,000. Loan maturity: Revolving loans may have a maturity of up to 20 years (10 years revolving, 10 years term). Term loans may have a maturity of up to 10 years. Underwriting: Actual or projection-based debt service coverage equal to or greater than 1:1. If based on projections, must break even within 2 years from first loan disbursement. Collateral: At a minimum, the Lender must place a lien on all business assets with exceptions for vehicles and trading assets. Annual review of financials: Required. Lender fees: In addition to the fees in SOP 50 10 8, Ch. 4, Para. C.2, at the time of the annual review, the Lender may charge up to 50 basis points annually, calculated based on the maximum loan amount. If treating the loan like an asset-based line, Lender may charge an extraordinary servicing fee (but not also the 50 basis points). PLP Lenders: Lenders with PLP delegated authority must process all MARC loan applications using their PLP delegated authority. Complete program details on the MARC is hereby incorporated into SOP 50 10 8 as Appendix 13. Questions Questions concerning this Notice may be directed to the Lender Relations Specialist in the local SBA Field Office. Thomas Kimsey Associate Administrator Office of Capital Access PAGE 2 of 2 EXPIRES: 9/1/26 SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete Must be accompanied by SBA Form 58 Federal Recycling Program Printed on Recycled Paper

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