SBA SOP 50 10 8, B.Ch4.A.1 — Eligibility and Eligible Uses of Proceeds for Export Express
Verbatim text of SBA SOP 50 10 8 section B.Ch4.A.1 (Eligibility and Eligible Uses of Proceeds for Export Express), effective 2025-06-01. 6 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 SBA's own document page serves superseded editions, and the SOP is further amended by policy notices — read this with the notices that touch it.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.Ch4.A.1 — Eligibility and Eligible Uses of Proceeds for Export Express — 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.Ch4.A.1
1. Eligibility and Eligible Uses of Proceeds for Export Express In addition to the core requirements identified in Section A, eligibility for Export Express is limited to businesses that have been in operation, although not necessarily as Exporters, for at least 12 full months. However, Applicants that have been in operation for less than 12 months are eligible if both of the following conditions are met: • The Applicant’s key personnel have clearly demonstrated Export Transaction expertise and substantial previous successful business experience; and • The Lender processes the Export Express loan using conventional commercial loan underwriting procedures and does not rely solely on credit scoring or credit matrices to approve the loan. Non-bank Lenders that do not have a conventional loan portfolio must submit their underwriting procedures to the Office of Credit Risk Management for written approval prior to making an Export Express loan. Evidence of compliance with both of these requirements must be retained by the Lender in its file. Export Express loans must be used for an export development activity, which includes the following: i. Obtaining a Standby Letter of Credit when required as a bid bond, performance bond, or advance payment guarantee; ii. Participation in a trade show that takes place outside the United States; iii. Translation of product brochures or catalogues for use in markets outside the United States;
SOP 50 10 8 B.Ch4.A.1.iii.iv
iv. Obtaining a general line of credit for Export Transaction purposes (as a normal course of business, the Borrower may use portions of the line of credit for domestic purposes, as long as no less than 70% of the line of credit will be used for export purposes); v. Performing a service contract from buyers located outside the United States; vi. Obtaining transaction-specific financing associated with completing Export Transaction orders; vii. Purchasing real estate or equipment to be used in the production of goods or services for Export Transactions;
SOP 50 10 8 B.Ch4.A.1.iii.viii
viii. Acquiring, constructing, renovating, modernizing, improving, or expanding a production facility or equipment to be used in the United States in the production of goods or services for Export Transactions; ix. Providing term loans and other financing to enable a small business concern, including an export trading company and an export management company, to develop a market outside the United States; x. Refinancing debt as outlined in Paragraph b. immediately below; and
SOP 50 10 8 B.Ch4.A.1.x.xi
xi. Financing indirect exports. The term “indirect export” applies to situations where, although the Borrower’s direct customer is located in the United States, that customer will be exporting the items/services it purchased from the Borrower to a foreign Buyer. In such cases, the Borrower must provide documentation to the Lender from the Borrower’s domestic customer (typically in the form of a letter, invoice, order, or contract) that the goods or services are in fact being exported. xii. Change of ownership only under conditions outlined in Paragraph c. below. Debt Refinancing: 13 CFR §§ 120.140(j)(1) and 120.201 SBA-guaranteed loan proceeds may not be used to pay a creditor in a position to sustain a loss (including the same institution’s debt). This includes any refinancing that will shift all or part of a potential loss from the original lender to the SBA. The debt to be refinanced must be, and must have been, current for at least the last 12 months or for the life of the loan, whichever is less. “Current” means that a required payment has not remained unpaid for more than 29 days. A loan that has matured and not been paid within 29 days of the maturity date is not current and is not eligible for refinancing. i. A Lender may refinance debt under Export Express as follows: a) A Lender may refinance an existing non-SBA guaranteed loan or Borrower debt from another lender if: i) The Lender determines the existing debt no longer meets the needs of the Applicant (for example, if the current loan is a term loan and a revolver is needed); ii) The new payment amount must be at least 10 percent less than the existing payment amount(s) in the aggregate, which may include a balloon payment due within 18 months. If the note term of the debt being refinanced includes an escalating payment structure, the new installment amount must be at least 10 percent less than the expected installment amount within the next 12 months. If other debt is being refinanced at the same time, such debt may be included in the cash flow improvement calculation. Refinancing revolving debt is not subject to the 10 percent payment improvement requirement; and iii) The Lender obtains documentation to verify that the new loan or line of credit will be used for export development activities. b) An Export Express Lender may not refinance its own non-SBA guaranteed debt to the Applicant under Export Express. The application must be processed under non-delegated procedures either as a 7(a) Small or Standard 7(a) loan. c) An Export Express Lender may not refinance one of its own Export Express loans or one of its own SBA-guaranteed loans with a new Export Express loan. d) Lenders must avoid any circumstances that could create a possible conflict of interest. Also, in refinancing debt, particularly credit card debt, Lenders must take reasonable steps to ensure Applicants are aware and certify that refinancing comprises only business-related debt. (SBA Form 1919, Borrower’s Information Form, includes such a certification.) e) Merchant cash advances and factoring agreements are not eligible for refinancing. ii. A 7(a) loan may not be used to refinance a debt owed to a Small Business Investment Company (SBIC) or a New Markets Venture Capital Company 13 CFR § 120.130(b). iii. The payment of trade payables is not considered to be debt refinancing. Change of Ownership (13 CFR § 120.202). i. An Applicant may use Export Express loan proceeds for a change of ownership, whether the change of ownership is accomplished through a stock purchase or an asset purchase, only under the circumstances described in this Paragraph. An asset purchase will be deemed a change of ownership and must comply with all of the requirements of this Paragraph if the Applicant is purchasing all or substantially all of the assets of the seller’s business. The following requirements apply: a) The Applicant must purchase 100% of the ownership interest in another small business or acquire all or substantially all of the assets of another small business through an asset purchase. b) Regardless of whether the change of ownership is a stock purchase or an asset purchase, the Applicant must acquire from the seller real estate, a production facility or equipment to be used in the United States in the production of goods or services for export. i) The Applicant must be eligible under Para. A.1.a. of this Chapter. ii) Either the Applicant or the business being acquired (i.e., the seller) must be currently engaged in exporting. iii) The acquisition must enhance the export operations of the Applicant or the ability of the Applicant to export. ii. The following changes of ownership are not eligible for financing as an Export Express loan: a) A change of ownership between existing owners of the Applicant. b) A change of ownership where the Applicant is purchasing less than 100% of the ownership of a business. iii. The maximum 7(a) loan uses of proceeds for any change of ownership is capped at the business valuation amount. When the business valuation is lower than the sales agreement, any financed capital required to meet the shortfall (in addition to the 7(a) loan and any equity injection) must be subordinate to the 7(a) loan.
SOP 50 10 8 B.Ch4.A.1.x.iv
iv. Seller earnouts/buyer rebates: Seller earnouts are prohibited; however, buyer rebates based on business performance are allowed because this is a benefit to the Borrower. If the Borrower receives funds based on the rebate, it should first be applied to pay down the 7(a) loan to a point that will not trigger a subsidy recoupment fee, and any remaining funds may be used for business purposes; v. The seller may not remain as an officer, director, stockholder, or employee of the Applicant. If a short transitional period is needed, the small business may contract with the seller as a consultant for a period not to exceed 12 months including any extensions. vi. The Applicant may be the Borrower, or the Applicant and the small business being acquired may be Co-Borrowers. vii. The Lender must comply with the requirements for IRS verification identified in Section A, Ch. 5, Para. B, IRS Tax Transcript/Verification of Financial Information. viii. The Lender’s loan documentation must include: a) A current business valuation (not to include any real estate) that meets SBA requirements in Paragraph 4.d., Real Estate Appraisal and Business Valuation Requirements, of this Chapter. b) A site visit of the business being acquired. The Lender must document in its loan file the date of the site visit as well as comments. c) An analysis of the following: i) The Applicant meets Export Express Loan Program Requirements under Para. A.1.of this Chapter; ii) Whether the Applicant or business being acquired (i.e., the seller) is currently engaged in exporting; iii) How the change of ownership will result in the acquisition of facilities or equipment to be used in the United States in the production of goods or services for export; and iv) How the acquisition will enhance the export operations of the Applicant or the ability of the Applicant to export. d) Business, stock, and asset purchase agreements, as applicable. e) Evidence that all assets conveyed as a result of the purchase are properly secured as collateral by Lender. ix. The “purchase price of the business” includes all assets being acquired, such as real estate, machinery and equipment, and intangible assets. x. Intangible Assets: An Export Express loan may be used to finance a change of ownership that includes intangible assets (including, but not limited to, goodwill, client/customer lists, patents, copyrights, trademarks, intellectual property, and agreements not to compete) as long as it is supported by an independent business valuation that complies with Paragraph 4.d., Real Estate Appraisal and Business Valuation Requirements, of this Chapter. a) If any of the loan proceeds will be used to finance intangible assets, the amount must be specifically identified in the Use of Proceeds section of the application and E-Tran. b) The value of the intangible assets is determined by either the book value as reflected on the business’s balance sheet, a separate appraisal for the particular asset, or the value of the business as identified in a business valuation that complies with Paragraph 4.d., Real Estate Appraisal and Business Valuation Requirements below minus the sum of the working capital assets and fixed assets being purchased. c) While a change of ownership financed by an Export Express loan may include the acquisition of intangible assets, the change of ownership must also include the acquisition of real estate, a production facility or equipment to be used in the United States in the production of goods or services for export. Loan proceeds may not be used to: i. Finance operations outside of the United States, except for the marketing and/or distribution of products/services exported from the United States; or
SOP 50 10 8 B.Ch4.A.1.i.ii
ii. Refinance existing SBA-guaranteed loans except as permitted under Paragraph b.i.c) above. When an Export Express loan finances specific export transactions (including indirect exports) under Paragraph 1.a.i, v, or vi above, the Lender must determine if U.S. companies are authorized to conduct business with the Parties and the country(ies) to which the goods or services will be shipped. Lenders must check Ex-Im Bank’s Country Limitation Schedule, which can be found on Ex-Im Bank’s website at www.exim.gov/tools-for-exporters/country-limitation-schedule or is available from SBA’s Office of International Trade. The Lender also must check the Department of Treasury Office of Foreign Assets Control (OFAC) sanctions lists, which can be found at sanctionssearch.ofac.treas.gov/. i. For federally-regulated Lenders, compliance with the procedures required by the Lender’s Federal Financial Institution Regulator will constitute compliance with the above referenced OFAC requirement. ii. For SBA Supervised Lenders, Lender must check the OFAC sanctions lists prior to first disbursement of funds on each specific export transaction. A loan may not be made to a business that directly or indirectly exports to a foreign country which is listed as a prohibited country (Note # 7 on the Country Limitation Schedule), or if the transaction would be prohibited under any of the sanctions programs administered by OFAC. Documentation required: SBA requires the Lender to obtain information from the Borrower pertaining to the use of proceeds and its projected impact on the Borrower’s export sales and retain that documentation in its loan file. The Applicant must provide documentation regarding the following items (this may be in the form of a general business plan, an attachment to the loan application or on a Lender-developed questionnaire): i. Estimated total export sales the loan will support; ii. A brief description of the business’ product or service which will be exported; iii. An explanation of how the loan proceeds will enable the business to enter a new export market or expand in an existing export market; iv. The countries to which the business will export; and v. An estimate of the Borrower’s export sales for the 12 month period following the date of the loan application.
Operationalizing SBA SOP 50 10 8, B.Ch4.A.1 — Eligibility and Eligible Uses of Proceeds for Export Express
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-b-ch4-a-1/
· register sba-sop-b-ch4-a-1 · Claude for Compliance. Free to read and download;
see regulatory updates and methodology.