Biden Administration to improve small business loan program
On August 1, the SBA announced implementation of additional policies aimed at expanding small business’ access to capital by modernizing SBA’s signature 7(a) and 504 Loan Programs. The new simplified guidelines for lenders include updated origination policies and procedures, lender participation requirements, and 7(a) loan servicing and liquidation requirements. SBA has also clarified affiliation standards to effectively communicate who qualifies for SBA loans, will use technology updates to bring eligibility determinations in-house, and will also use advanced data analytics and third-party data checks for fraud review on all loan programs before approval.
The following three SBA SOPs took effect on August 1, bringing many of the new policies into practice:
- SOP 50 10 7: Lender and Development Company Loan Programs: Contains SBA’s policies and procedures governing the 7(a) and 504 loan programs.
- SOP 50 56: Lender participation requirements: Contains the criteria for becoming an SBA Lender.
- SOP 50 57: 7(a) Loan Servicing and Liquidation: Contains the policies and procedures for 7(a) loan servicing and liquidation.
Finally, the SBA will begin accepting the Universal Purchase Package, a new feature that is expected to streamline the process for lenders to request SBA honor its loan guaranty. SBA will also introduce new features in E-TRAN, SBA’s online platform used by lenders to upload loan applications.