Get Implementing The New SBA : Streamlining Loan Servicing - Sba

On August 1, 2023, SBA implemented policies to expand access to capital for small businesses by modernizing SBA's signature 7(a) working capital* and 504 fixed asset loan programs.

The U.S. Small Business Administration (SBA) updated its policies and procedures for the SBA loan programs through a new Standard Operating Procedure (SOP 50 10 7) that went into effect on August 1, 2023.

SBA's final rule clarifies that this rule only applies to contracts set aside or reserved for small businesses – meaning, a joint venture cannot be populated with individuals intended to perform for any contract or agreement set aside or reserved for small businesses, unless all parties to the joint venture are " ...

The PPP loan amount is equal to 2.5 times the average monthly payroll costs.

Standard Operating Procedures (SOPs): SOPs are permanent directives that set forth the policies and procedures relating to SBA's programs and activities. Policy notices: Policy notices are used to convey a change in policy. Policy notices may be temporary or permanent.

Currently, both the 7(a) and 504 programs require lenders to sign and submit a loan authorization document to SBA. The proposed rule would: Remove the loan authorization requirement and rely on the terms and conditions of the loan application that lenders also submit.

Current SBA 7(a) loan interest rates SBA loan sizeMaximum interest rate$50,001 to $250,00014.5%.$250,001 to $350,00013%.$350,001 or more11.5%.*Rates calculated with the current prime rate of 8.5%. Updated October 2023.1 more row

In the case of a loan modification, the business owner intends to pay 100% of the amount owed, plus interest. He is merely seeking longer amortizations, balloon payments due at the maturity of the loan or a reduction in the interest—all with the goal of reducing the monthly debt service.