The vehicles are in the starting grid at the Brickyard, AKA, the Indy 500, from the pole car in the front row to the last car in the field of 33. Soon, they’ll start their engines and peel off in a massive roar of industrial might. And the moment they’d been waiting for: “Gentlemen and Ladies: Start your engines – effective August 1, 2023!”
Yep. That’s right. SBA Information Notice 5000-84702, issued on May 10, 2023 announced the effective date of the new SOP – affectionately known as SOP 50 10 7 – as August 1, 2023. Start your engines? Keep idling ’til August? Concerned about significant changes? Worry not:
JRB’S SOP WEBINAR SERIES IS ON THE WAY!
You asked us to bring it back. And so we shall!
Beginning in early June, our 30-minute bi-weekly sessions led by JRB Senior Associates
Richard Jeffrey, Sandy Mortan and SBA expert Jan Garlitz will cover key points in the new SOP.
As always, JRB’s Webinars are free of charge.
We look forward to you joining us!
Stay tuned for details!!
So we’ll use SOP 50 10 6, parent of 50 10 7 until August 1. Yet I guess it’s good that you’ve revved up your engines because we’re already in the race. We’re in the midst of a series of SBA Notices, most specifically SBA Procedural Notice 5000-84660, implementing regulatory changes previously announced. Those affecting 7(a) loans have been implemented: Raising the ceiling on 7(a) small loans to $500,000; farewell to the franchise directory; and allowing 7(a) loans to finance partial buy-outs are some of largest.
Changes in Affiliation rules of course affect all SBA loans and were also well known in advance. Very loosely and in a nutshell, Affiliation changes from control to ownership, with 50% being the threshold. Or if there is no owner of 50%, the threshold is 20% for entities operating in the same 3-digit NAICS subsector as the applicant.
Importantly, Lending staff involved in closing and servicing should note two changes that might have gotten lost in the shuffle. First, SBA requires Hazard Insurance on all collateral being financed by the loan proceeds and, if the Project (not just the loan amount) is greater than $500,000, SBA requires Hazard Insurance on all assets pledged as collateral, not just collateral financed by the loan. But if SBA approved your loan before May 11, 2023, you’re stuck with the provisions of 50 10 6.
Now, get ready for JRB’s SOP Webinar Series starting soon.
Stay tuned for more information!