The Small Business Administration is issuing a proposed rule amending several regulations relating to the 7(a) and 504 loan programs used by banks. The proposed changes are intended to streamline SBA processes and update or remove outdated provisions — for example, by replacing the Certified Lenders Program with SBA “delegated authority” criteria.
The proposed changes include redefining cooperative businesses as eligible for SBA-backed loans; clarifying terms related to eligible passive companies, including expanding SBA’s discretion to require personal guarantees from minority owners; providing more lender flexibility on when base rates are determined and when variable rates are adjusted; clarifying what fees lenders may or may not collect from loan applicants; and expanding the pool of parties who are permitted access to lender information when needed to avoid case-by-case approvals.
The proposal includes amendments to reflect updated technology or practices, such as revising guidelines for paying guaranty fees to reflect electronic payments and removing language describing “on-site” exams. It would also specify that SBA can charge lenders the actual cost of reviews and assessments associated with additional oversight, rather than apportioning those expenses among all lenders. Comments on the proposal are due Oct. 7.
