Our WBD team attended the Wisconsin Lender’s Conference on May 15 at the Kalahari Resort in Wisconsin Dells. We joined several learning sessions, connected with lenders, enjoyed an awards luncheon, and capped the day with a networking reception in the grand ballroom. Fortunately, the tornado sirens during the final session didn’t lead to any severe weather.
With so many changes happening at SBA within the past few months, it was perfect timing for the industry to come together before the new SOP 50 10 8 took effect on 6/01/2025. Becky and I, along with Jason Monnett, Executive Vice President of WBD, provided a separate 7(a) training session to lenders on Wednesday before the conference began to kick things off! We had a full room of attendees where we discussed not only the basics of SBA 7(a) lending but covered the various changes with the new SOP 50 10 8 as well. We hope to continue and expand that session next year so stay tuned!
I sat in on four sessions over the course of the day which included the following:
(1) SOP 50 10 8 Updates (Part 1)
(2) 7(a) Loan Closings
(3) SOP 50 10 8 Updates (Part 2)
(4) Economic Updates
Lots of valuable information was covered but my overall takeaway was that SBA lending is tightening back up and reverting to many of the rules that were part of SOP 50 10 6 (with some new additions as well). Lenders must be prudent in their underwriting efforts and really understand the nuances of the new SOP. A few updates that really stood out to me were the new rule that PLP lenders are now required to utilize their delegated authority for all applications unless refinancing same institution debt or processing an International Trade Loan where collateral isn’t in a first lien position, the re-establishment of SBA’s Franchise Directory, a welcome change to how franchise lending has recently been handled, updates in equity requirements where start-ups once again require a 10% equity injection of the total project costs, and citizenship requirements being tightened up.
In the weeks since the conference was held, a new technical update version of SOP 50 10 8 has been issued which tweaked certain sections of the document even further. Updates included but are not limited to the following:
- All direct and indirect owners and guarantors must have a primary residence in the United States, its territories, or possessions.
- SBA lenders must check the Credit Alert Verification Reporting System (CAIVRS). This was previously included in the prior version as ‘should’ vs. ‘must’.
- SBA lenders must determine that the applicant business and owners are not listed on the OFAC sanctions list at time of application.
- If SBA lender is unable to obtain a required tax return transcript due to IRS having ‘no record of return’, SBA will permit lender to proceed if both of the following have been obtained: (1) proof of filing of required tax return, either through evidence of an IRS E-File submission or a paper return that has been stamped as received by the IRS, and (2) proof of payment or refund of tax liability that reconciles with the stated liability on the tax return.
- Any selling owner who remains as direct or indirect owner of < 20% must provide guaranty for full loan amount with term the later of (1) a period of at least 2 years after final loan disbursement; or (2) until the loan has been current (making payments in accordance with terms of the Note and not on deferral) for 12 consecutive months. SBA does not require these guarantors that are providing a 2-year guaranty to provide their assets in the case of collateral shortfall.
- Threshold raised to greater than $20,000 for when a lien needs to be placed on a vehicle and added guidance that lenders do not have to place a lien on a vehicle that already has a lien on it.
- SBA lenders are now required to enter into E-Tran 100% of direct and indirect owners of the applicant business.
- Recently emerging practice in “search funding” is not eligible for the 7(a) loan program.
So many changes and updates… how does one keep up? That is where we at WBD come in! Our staff handles SBA all day, every day and are familiar with the changes and updates so that when you have questions you can reach out to us. If we don’t know the answer we will get it for you! Feel free to contact us either by phone at (608) 316-7143 or via email at LenderServices@wbd.og and we can assist you with your questions, or maybe even your next SBA project!
Links to the Technical Correction version of SOP 50 10 8 and SBA Notice 5000-866746:
SOP 50 10 8 Technical Updates effective 6.1.2025.docx
Issuance of SOP 50 10 8 with Technical Updates | U.S. Small Business Administration
