On October 6, 2023 SBA published a Notification in the Federal Register introducing the new ALP Express Pilot Program, effective October 1, 2023.

The “new” ALP Express picks up from the authority previously authorized under the Economic Aid Act which expired on September 30, 2023. Pretty much the same, with a few notable changes – all benefiting ALP Express CDCs:

  • Now, there’s no prohibition against 504 loans to borrowers in industries with a high rate of default, e.g., an industry that for the past five (5) fiscal years has 50 or more approvals per year and an annualized default rate of 5% or above. The reason: SBA has determined that there are no industries with a high rate of default in the 504 Loan Program based on the 504 loan portfolio performance.
  • SBA now does a technology compliance check on all loans, including ALP Express Pilot Loans ($500,000 or less for the 504 loan portion), and has streamlined affiliation policy guidance.
  • SBA is delegating authority to ALP CDCs to make the final decision as to the applicant’s creditworthiness for ALP Express Pilot Loans. SBA will continue to review each loan for eligibility.

This program remains a pilot, enabling SBA to evaluate the effects of the changes over time.Effective October 1, 2023, the new ALP Express Pilot Program will remain in effect for up to two years, not extending past September 30, 2025. Comments? Submit comments to SBA using one of the submission options on pp. 69529-69530 of the Notification.

SBA will be releasing an updated ALP Express Program Guide which also will have some changes, such as eliminating SBA’s review of franchises, religious activities, and so on. Stay tuned!