With the new SBA SOP 50 10 7 in effect as of August 1, 2023, there’s plenty of new information you must know about the SBA space. These rule changes will greatly impact your SBA lending, with the “do what you do” concept particularly taking centerfold.
Biz2x has had the privilege of working with Windsor Advantage to best understand these new rule changes and their impacts. Read on as we break it all down.
Please note that technical corrections often take place after the SOP announcements, so all highlighted changes are subject to change.
1. The "do what you do" rule
The “do what you do” concept is not new to SBA. In fact, according to Windsor Advantage, “this language is not actually new, and was referenced 60 times in the previous SOP (50 10 6) and it is referenced 76 times throughout the new SOP (50 10 7).” The “do what you do” rule can most simply be explained as that you can follow the same procedures for SBA guaranteed loans as you do for non-SBA guaranteed loans.
You can find an in-depth look into all things “do what you do” at Windsor, but the most important thing to note is that the rule has been expanded and is more important than ever.
2. Necessary documentation
Documentation is essential during the SBA loan process. Understanding which documents you do and don’t need will help you stay focused and avoid unnecessary time spent on paperwork.
You should still expect to have credit memos prepared to address the conventional policy requirements, but one example of something removed is the fingerprint background check.
With the new SBA rule changes, there have been some changes to what you must provide.
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3. Clarifying rule changes
There are plenty of rule changes coming into effect with the introduction of SBA SOP 50 10 7. From Windsor:
“Moving forward, all SBA refinances are automatically eligible if existing SBA lender is unable to increase existing SBA loan or make a second loan AND new loan meets the 10% payment improvement requirement (assuming the existing SBA loan is current and putting SBA in a position to take over a non-performing loan).”
In addition to clearing up this gray area, there are various areas in which SBA is lowering its requirements, such as removing equity injection verification requirements, flood insurance requirements, and more.
Looking to learn more about SOP changes? Biz2X is always happy to provide more information for you, whether it be in a meeting or in our resource center. Additionally, we highly recommend staying up to date with Windsor Advantage’s latest content. Windsor is on top of all things SBA, providing timely, thorough updates on rules, documentation, and more.