SBA SOP 50 10 8, B.Ch2.D.1 — Contents of Lender’s Application for Guaranty
Verbatim text of SBA SOP 50 10 8 section B.Ch2.D.1 (Contents of Lender’s Application for Guaranty), 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 SBA's own document page serves superseded editions, and the SOP is further amended by policy notices — read this with the notices that touch it.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, B.Ch2.D.1 — Contents of Lender’s Application for Guaranty — 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 B.Ch2.D.1
1. Contents of Lender’s Application for Guaranty Lenders that do not have delegated PLP or SBA Express authority: Must submit applications to SBA via E-Tran for SBA approval under non-delegated procedures. Lenders with delegated PLP or SBA Express authority: • May only submit applications to SBA via E-Tran for approval under non-delegated procedures when the loan will refinance the Lender’s same institution debt. SBA Express loans may not be processed under non-delegated procedures. • Except for the above, must process all loan applications using their delegated authority. • May submit questions on a specific loan application, including the names of the principals and the address of the project, to [email protected]. Lender must provide sufficient information on the specific application to avoid delays in responses. Lender is to provide a summary of the facts – SBA will not be reviewing the entire case file or multiple attachments. • Must make a request for an exception for any type of 7(a) loan to [email protected], providing detailed information about the application including the names of the principals, address of the project, and a discussion of the policy for which the exception is being requested along with an explanation why the exception to policy should be granted. If SBA approves the exception, the Lender will receive an email confirming the approval, and the Lender must proceed to process the application under delegated authority. The Lender must retain the approval email in the loan file. Exceptions to policy will be considered on a case-by-case basis, and the decision will only apply to the specific request. The decision must be documented in the appropriate loan file. Lender is to provide a summary of the facts – SBA will not be reviewing the entire case file or multiple attachments. • The [email protected] email account is only for Lenders with delegated authority that have questions about a specific loan application and is not to be used for general policy questions, which should be sent to [email protected]. Lender must submit to E-Tran all terms and conditions required by E-Tran data fields. Lender must list in E-Tran at least 81% of the total direct and indirect ownership of the Applicant. The ownership percentage of married spouses and minor children must be combined. SBA Form 1919 includes information on the number of existing employees at the time of application and the number of jobs to be created and/or retained as a result of the loan. • Number of existing employees at the time of application is calculated in accordance with 13 CFR § 121.106, which states in part that SBA counts all individuals employed on a full-time, part-time, or other basis (i.e., jobs are not converted to full-time equivalents). • Jobs “created” means the number of full-time (or equivalent) employees that the small business expects to hire as a result of the loan. • Jobs “retained” means the number of full-time (or equivalent) employees on the payroll of the business at the time of application that will be lost if the loan is not approved. • “Employees” does not include contractors reported via IRS Form 1099. Processing: Program forms can be found at www.sba.gov/document. All loan files must include the forms and information the Lender requires in order to make an informed credit decision. Any application form obtained by the Lender from the Applicant must be certified by the Applicant as true and complete. For 7(a) Small loans: i. Lenders must obtain and retain in their loan file SBA Form 1919 and submit into E-Tran the information required in SBA Form 1919. Only the information required on SBA Form 1919, and not the form itself, must be submitted into E-Tran. ii. Lenders must obtain and retain the following in their loan file. Additionally, the following items in bold must be submitted into E-Tran when submitting a loan for non-delegated processing: a) SBA Form 1919 Only the information required on SBA Form 1919, and not the form itself, must be submitted into E-Tran. b) Lender’s Credit Memorandum, which must address all requirements detailed in Paragraph C, Credit Standards for 7(a) Small Loans & SBA Express in this Chapter. c) Owner Financial Statement (business or personal, as applicable) signed and dated within 120 days of submission to SBA, for all owners of 20% or more (including the assets of the owner’s spouse and minor children), and proposed guarantors, except Supplemental Guarantors. Lenders may use SBA Form 413 or their own equivalent form. d) Provide the following if real estate is to be purchased with loan proceeds: i) Appraisal; ii) Copy of signed purchase agreement; iii) Lender’s environmental questionnaire (if applicable – see Section A, Ch. 5, Para. E, Environmental Policies and Procedures); iv) Cost breakdown where improvements to the real estate are included; e) Provide the following if purchasing an existing business with loan proceeds: i) Copy of buy-sell agreement; ii) Copy of business valuation; iii) Pro forma balance sheet for the business being purchased as of the date of transfer; iv) Copy of seller’s financial statements for the last 3 complete fiscal years or for the number of years in business if less than 3 years. The financial statements must be dated and either signed or certified by the seller within 120 days prior to submission to SBA; and
SOP 50 10 8 B.Ch2.D.1.v
v) Seller’s interim financial statements no older than 120 days from date of submission to SBA. The financial statements must be dated and either signed or certified by the seller. If seller’s financial statements are not available, the seller must provide an alternate source of verifying revenues. If seller’s financial statements are not available, Lender must discuss in its credit analysis: (a) Why financial statements are not available; and (b) How the Lender verified business revenue. f) Debt Refinancing. Lenders must maintain copies of all notes being refinanced, security agreements, leases, transcripts for the most recent 12 months (to prove debt being refinanced is current) or other documentation evidencing the debt to be refinanced in the loan file. For non-delegated loans, Lender must submit copies of all these documents for the debt to be refinanced to the LGPC with the application. g) Franchise: For any Applicant operating under a franchise, license or similar agreement, refer to Section A, Ch. 1, Para. G., “Franchises”. h) Documentation of U.S. National and/or LPR/USCIS status verification in accordance with Section A, Ch. 1, Para. F, “Businesses Owned by Non-U.S. Citizens”. Lenders must receive verification of the status of each alien required to submit USCIS documents prior to submission of the application or request for loan number to SBA. Lender may submit a copy of the verification received from USCIS or SBA-SLPC or confirm in its credit memorandum that verification has been obtained. Lender must retain documentation proving a U.S. National’s status (birth certificate and/or passport) in the loan file. i) Tax transcripts or business tax returns in accordance with Section A, Ch. 5, Para. B, IRS Tax Transcript/Verification of Financial Information., although the Lender must obtain and retain the signed form in its file. j) Management agreements, if applicable, and if the management agreement is not part of the franchise disclosure documents for a brand listed on the Franchise Directory. See Section A, Ch. 1, Para. E.3.e. on management agreements. For SBA Express loans: i. Lenders must obtain and retain in their loan file SBA Form 1919 and submit into E-Tran the information required in SBA Form 1919. Only the information required on SBA Form 1919, and not the form itself, must be submitted into E-Tran. ii. Lenders must obtain and retain in the loan file: a) Lender’s Credit Memorandum, which must address all requirements detailed in Paragraph C, Credit Standards for7(a) Small Loan & SBA Express b) If the Lender uses business financial statements and/or tax returns for purposes of credit underwriting, all financial statements, tax returns and schedules reviewed and required by Lender’s policy for its similarly- sized, non-SBA guaranteed commercial loans must be maintained in the Lender’s SBA Express loan file. All financial documents must comply with the Lender’s policies on collection and review of financial information. c) If Lender does not use business financial information to determine creditworthiness, such as with some credit scoring models, Lender must obtain IRS tax transcripts in order to verify that the returns were filed and for the purpose of determining the Applicant’s size (but reconciliation of the tax transcripts as set forth in Section A, Ch. 5, Para. B, IRS Tax Transcripts/Verification of Financial Information, of this Part is not required). d) Franchise: For any Applicant operating under a franchise, license or similar agreement, refer to Section A, Ch. 1, Para. G., “Franchises”. e) Debt Refinancing. Lenders must maintain copies of all notes being refinanced, security agreements, leases, transcripts for the most recent 12 months (to prove debt being refinanced is current) or other documentation evidencing the debt to be refinanced in the loan file. f) Documentation of U.S. National and/or LPR/USCIS status verification in accordance with Section A, Ch. 1, Para. F, “Businesses Owned by Non-U.S. Citizens”. Lenders must receive verification of the status of each alien required to submit USCIS documents prior to submission of the application or request for loan number to SBA. Lender may submit a copy of the verification received from USCIS or SBA-SLPC or confirm in its credit memorandum that verification has been obtained. Lender must retain documentation proving a U.S. National’s status (birth certificate and/or passport) in the loan file. g) Management agreements, if applicable, and if the management agreement is not part of the franchise disclosure documents for a brand listed on the Franchise Directory. See Section A, Ch. 1, Para. E.3.e. on management agreements. h) Lender’s environmental questionnaire (if applicable – see Section A, Ch. 5, Para. E, Environmental Policies and Procedures).
Operationalizing SBA SOP 50 10 8, B.Ch2.D.1 — Contents of Lender’s Application for Guaranty
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