Simple. We like simple. We like all-inclusive when it comes to vacation packages, we like bundles when it comes to insurance policies, and we like one price covering “all you can eat” at a brunch buffet.

Now, SBA has released a new Form 413, designed to make things simple for lenders when collecting financial information from applicants. In the past, depending on the type of loan, you had to choose between four different personal financial statement forms to provide to the applicant. And now, one form fits all!

SBA Information Notice 5000-81332, effective July 13, 2021, alerted us to the new SBA Form 413.

What’s changed? It’s all-in-one. At first glance, you’ll see that the new form is divided into four sections, combining the former forms into one. The form requires lenders to check the appropriate box for each program-specific section:

  1. 7(a) Loan/504 Loan /Surety Bonds
  2. Disaster Business Loan Application (Excluding Sole Proprietorships)
  3. Women Owned Small Business (WOSB) Federal Contracting Program
  4. 8(a) Business Development Program

This new form has program-specific instructions as to who should complete Form 413 and where completed forms should be submitted. SBA has included detailed guidelines and instructions for each program office to eliminate confusion and to assist the lender in making sure the applicant is applying under the appropriate program.

For example, if an applicant applies for assistance under the Woman Owned Small Business Program or the 8(a) Business Development Program, the program-specific guidelines will help lenders assess whether applicants meet the economic disadvantage threshold to qualify.

Why the change? It’s all part of the big picture. SBA continues to streamline processes to reduce the burden on SBA lenders, which trickles down to the applicants. Less paperwork and less time searching for the right forms means faster processing, faster loan turnaround times ─ and for you ─ happy borrowers. Also the added program-specific guidance helps you stay compliant with program regulations.

What hasn’t changed? The data collection fields that the applicant/principal/guarantor should complete are the same. They’re nearly identical to the last form.

Can my applicants still provide me a personal financial statement in a different format? Applicants for 7(a) loans, 504 loans, or disaster loan assistance can submit personal financial statements in other formats if the information provided is the same as collected by SBA Form 413. As a lender, you can still provide your own form provided it collects the same data. Yet in our experience in working with clients across the country, we’ve found that the best way to avoid missteps that would affect the guaranty is to keep it simple: Use Form 413. NOTE: SBA Form 413 must be collected from applicants for 8(a) Business Development Program and Woman Owned Small Business Program loans.

Important: Bottom line. The new Form 413 is in force until May 31, 2024 so please start using it immediately. If you have applications in process using the old form, don’t worry – SBA will accept them. As of September 11, 2021, SBA will only accept the new Form 413. Try it on. It’ll fit your program!

Paul Baker
JRB Associate