For the times they are a changin’ …”
─Bob Dylan, 1964

 Be it Dylan, Clapton, Crowe or many rappers, the music world is filled with songs about change. Contemporary song writers have written about change decade after decade. Is one of them running through your head right now?

 Whatever song you like best, one thing’s for sure: change is constant. Just when you think a change is completed, Bang! you’ve got another change. A few weeks ago, I wrote a JRB eBulletin about changes to SBA Form 159, the Fee Disclosure and Compensation Agreement. Was I finished covering this subject? Nope. SBA announced more changes, as highlighted in Procedural Notice 5000-821479 effective November 12, 2021.  So here we go again.

Actually, this is a welcome change because it clears up some questions and confusion regarding who needs to execute the Form, where it should be submitted, and the deadline to submit. Changes noted are:

 Change #1: When the Lender pays an agent, all parties are required to sign the Form. For example, my recent eBulletin notes some confusion about whether a loan referral service, broker, or consulting service should be required to sign. I reported that in discussions with some SBA folks that the only the lender and the applicant were required to sign Form 159. However, it was considered a “best practice” to require an agent of the referral source, broker, or consulting service to sign. Now, the 159 Form for those services paid for by the lender requires signatures from everybody: the applicant, the lender and the agent of a third-party referral/broker/consulting service.

Change #2: For any compensation over $2,500 paid by the applicant OR the lender, Form 159 has a revised section regarding itemization and supporting documentation to require a detailed explanation of work performed; disclosure of whether compensation was paid on an hourly rate or a percentage of the loan amount. If the former, the amount of that hourly rate, and the number of hours spent working on each service performed.

Let’s say if the applicant or the lender pays compensation over the $2,500 threshold, you must include the justification and documentation of the charges.  Attach a statement from the agent to justify what was paid. Was it an hourly rate? What services were performed? Was it a percentage of the loan amount?  Include it!

Change #3: The form must be submitted electronically to SBA’s Capital Access Financial System (CAFS). Do not send to as this email address is no longer valid. Note: For 7(a) Loans, the documents must be uploaded in E-Tran Servicing within two SBA Form 1502 reporting cycles. For 504 Loans, the documents must be uploaded in the Corporate Governance Repository within 30 calendar days after the debenture funds.

Change #4: Lenders will no longer input the FIRS number on Form 159 but instead will use their Location ID.

Best Practice. Whether the applicant or lender pays an agent in connection with an SBA loan application, keep all copies of invoices, itemizations, and statements with each Form 159. It will save you time if SBA requests the information.

And always remember! A separate Form 159 must be completed for each application when an agent provides services to an applicant in connection with multiple applications. Don’t cut corners here. This is required by SBA and will be a factor in keeping your SBA guaranty safe.

Are we done? As they say, “Time will tell.”

Paul Baker
JRB Associate