February 2019
Commercial Lending
SBA Announces SOP Revisions Impacting 504 Lending

The Small Business Administration (SBA) has announced the issuance of Standard Operating Procedure (SOP) 50 10 5(K) for lender and certified development company (CDC) loan programs, including the 504 program.  The new SOP becomes effective April 1, 2019.

SOP Revisions Impacting SBA 504 LendingParticipants must continue to use SOP 50 10 5(J) in the execution of SBA 504 lending through March 31, 2019.

Highlights to this SOP update include, but are not limited to:

  Adds the 25-Year debenture.
  Revises the credit elsewhere test.
  Increases the threshold for CDC review of a 504 loan applicant’s owners’ liquidity from 10% to 20%.
  Provides guidance on the eligibility of marijuana related businesses and hemp related businesses.
•  Clarifies the franchise eligibility review process.
  Updates the job opportunity requirements.
  Adds the final rule on debt refinancing without expansion and updates guidance.
  Clarifies guidance on borrower occupancy requirements.
  Updates eligibility criteria for the 504 green loan program.

More detailed information regarding changes to the SOP can be found in SBA Information Notice 5000-19004.

To access the SBA Information Notice or SOP 50 10 5(K) please click below.

SBA Information Notice 5000-19004

SOP 50 10 5(K)

The SBA has not yet released a track changes version of the SOP.  More information to come as it becomes available.

For more information about SBA 504 loans in Alabama, Florida or South Georgia, contact a Florida First Capital Loan Officer or email us at info@FloridaFirst.com.  Phone: 850.681.3601 or toll-free at 800.504.LOAN.