No surprise: SBA has received lots of questions regarding Procedural Notice 5000-862692. What else to expect from a 14-page notice? At JRB, we’re dealing with our clients’ questions as they arise.

One of the stickier questions relates to the required signatures on personal financial statements:

Question. Are spouses with no ownership in the borrowing business (EPC or OC) required to disclose personal assets they own in their own name?

  • Bottom Line: Nope. Spouses without an interest in the borrower don’t have to disclose any assets they own in their own name. And they don’t have to sign the PFS. Any assets the spouses own jointly will be disclosed on the PFS of the owning spouse.

Want an example? OK. Let’s say Dr. McFee’s Medical Clinic is your SBA loan applicant. Dr. McFee’s wife has no interest in the medical clinic. Separately, she owns Fancy Stitches, a yarn shop where she teaches knitting to her customers. Dr. McFee has no ownership interest in Fancy Stitches.

Since Mrs. McFee has zero interest in the clinic, she isn’t required to guarantee the SBA loan. And since she owns Fancy Stitches outright, she’s not required to disclose that asset or any other assets she owns in her name. The PFS must list assets she owns jointly with her husband, but since she’s not guaranteeing the loan, she doesn’t have to sign the PFS. Only Dr. McFee must sign. Thus ensuring domestic tranquility at the McFee family home.

So everyone open your SOP. Go to page 71. And change it to read:1
“ The SBA Lender must obtain a personal financial statement from all proposed guarantors, except for:
i. When the SBA Lender credit scores owners/guarantors for 7(a) loans or for 504 projects $500,000 or less.
ii. In all cases, for both 7(a) and 504 loans of any size, SBA does not require spouses with no degree of ownership in the Borrower to sign a personal financial statement or to disclose assets, except to the extent that any assets are co-owned with the borrowing spouse.
iii. Supplemental Guarantors.”

Come to think of it, this helps ensure that meetings with your borrowers won’t hit any snags.

Got more questions about this notice? Contact JRB.

Richard Jeffrey
Senior Associate
richard@jrbrunoassoc.com
www.jrbrunoassoc.com

1 Procedural Notice 5000-862692 pp. 2-3: “SOP 50 10 7.1, Section A, Chapter 5, Para. A.1.e. (page 71) is revised as follows: …”

1/15/2025