SBA SOP 50 10 8, A.Ch1.H — CREDIT NOT AVAILABLE ELSEWHERE
Verbatim text of SBA SOP 50 10 8 section A.Ch1.H (CREDIT NOT AVAILABLE ELSEWHERE), effective 2025-06-01. 2 provision(s) quoted from the SOP PDF. SBA's own document page serves superseded editions, and the SOP is further amended by policy notices — read this with the notices that touch it.
Verbatim regulatory text
Verbatim provisions from SBA SOP 50 10 8, A.Ch1.H — CREDIT NOT AVAILABLE ELSEWHERE — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
SOP 50 10 8 A.Ch1.H
H. CREDIT NOT AVAILABLE ELSEWHERE (15 U.S.C. 636(a)(1)(A) and 13 CFR § 120.101) 1. The SBA Lender must certify and indicate that the Applicant does not have the ability to obtain some or all of the requested loan funds on reasonable terms from non-Federal, non-State, or non-local government sources, including from the SBA Lender or Third Party Lender, without SBA assistance. If the Applicant’s cash flow and collateral, including the adequacy of any third party guaranty, would cause the Applicant’s loan to meet conventional credit standards of the SBA Lender or Third Party Lender, the Project is not eligible for an SBA Loan. Failure of the SBA Lender to adequately address the Applicant’s need for the desired credit in the credit memorandum may result in SBA declining the application submitted under non-delegated processing or denying liability on the guaranty if the application is approved by a 7(a) Lender under its delegated authority or, in 504, the pursuit of a CDC Recovery Claim under 13 CFR § 120.938 in the case of fraud, negligence, or misrepresentation by the CDC. 2. The SBA Lender must include in its credit memorandum: A determination that some or all of the loan is not available from any of the following sources: i. The liquidity of owners of 20% or more of the equity of the Applicant, their spouses and minor children, and the Applicant itself (except that SBA permits owners to have reasonable funds set aside for possible future medical expenses, educational expenses (including for the children of the business owner) and retirement needs; and for the Applicant, SBA permits the Applicant to have reasonable funds for working capital needs); or
SOP 50 10 8 A.Ch1.H.ii
ii. Conventional lenders or other non-Federal, non-State, or non-local government sources of credit including the SBA Lender, and for 504 loans, the Third Party Lender. Note: This includes any commitment by a third party to provide financial assistance to the Applicant in the event of a delinquency or default on a payment (e.g., a commitment by a franchisor or licensor to provide financial assistance to the franchisee or licensee). Substantiate that credit is not available elsewhere by discussing acceptable factors that demonstrate an identifiable weakness in the credit. The SBA Lender must include in its credit memorandum the specific reasons why the Applicant does not meet conventional loan policy requirements, along with relevant supporting documentation. The SBA Lender may not cite the Applicant’s inability to meet the SBA Lender’s or Third Party Lender’s conventional credit score policy as the sole reason that credit is not available elsewhere. Acceptable factors that demonstrate an identifiable weakness in the credit or exceed policy limits of the SBA Lender or the Third Party Lender include, among others: i. The business needs a longer maturity than the SBA Lender’s/Third Party Lender’s policy permits to reasonably assure the ability of the loan applicant to repay the debt from the actual or projected cash flow of the business (for example, the business needs a loan that is not on a demand basis); ii. The requested loan exceeds the SBA Lender’s/Third Party Lender’s policy limit regarding the amount that it can lend to one customer; iii. The collateral does not meet the SBA Lender’s/Third Party Lender’s policy requirements; iv. The SBA Lender’s/Third Party Lender’s policy normally does not allow loans to new businesses (e.g., a business that has been in operation for a period of not more than 2 years) or businesses in the Applicant’s industry; and/or v. Any other factors relating to the particular credit that, by applying prudent lending standards, in the SBA Lender’s/Third Party Lender’s opinion, cannot be overcome except for the guaranty. These other factors must be specifically explained in the SBA Lender’s credit memorandum, and relevant supporting documentation must be included in the loan file. Examples of “other factors” may include business and personal credit history, management experience, leverage ratio, global cash flow, and loan size relative to the age of the business. 3. The SBA Lender/Third Party Lender may not rely on the following factors as the sole basis to demonstrate that the Applicant does not have credit available elsewhere: For 7(a) loans, the fact that the liquidity of the SBA Lender depends upon the guaranteed portion of the loan being sold on the secondary market; or SBA’s participation will allow the SBA Lender/Third Party Lender to exceed its legal lending limit. 4. The SBA Lender may not rely in any manner on the following factors to demonstrate that the Applicant does not have credit available elsewhere: The maintenance or improvement of the SBA Lender’s/Third Party Lender’s rating or performance evaluation under the Community Reinvestment Act (CRA) or its implementing regulations; or The improvement of the SBA Lender’s/Third Party Lender’s collateral lien position.
Operationalizing SBA SOP 50 10 8, A.Ch1.H — CREDIT NOT AVAILABLE ELSEWHERE
This is verbatim, source-snapshotted regulator text from the Claude for Compliance open corpus. To turn a rule like this into compliance work product: gap-analyze your policies and procedures (P&Ps) against these requirements to surface stale, conflicting, or missing provisions; operationalize any change with a ready-to-run update kit; and produce audit-ready evidence — every step grounded only in the regulator’s own words, never invented.
To work from the whole rulebook rather than this one page: download the corpus — every register on this site, verbatim, each with its source snapshot and effective date — then follow the methodology. It asks your assistant to answer only from the downloaded text, cite the register id and effective date it used, and tell you when the corpus does not cover something instead of filling the gap from memory. Running it locally also means no one sees which regulations you are looking at.
Source of record: https://claudeforcompliance.com/regs/sba-sop-a-ch1-h/
· register sba-sop-a-ch1-h · Claude for Compliance. Free to read and download;
see regulatory updates and methodology.