Breaking News — SBA Issues new SOP 5010 5 (I) — Revised Franchise Review and Changes to Credit Elsewhere
December 1, 2016
By Bob Coleman
Editor, Coleman Report
Breaking News — SBA Issues new SOP 5010 5 (I) — Revised Franchise Review and Changes to Credit Elsewhere
Effective January 1, 2017
The major changes are:
Revised Franchise Review
SBA:
a) will no longer review franchise and license agreements to determine affiliation between the franchisor and franchisee; instead, SBA will require the SBA Addendum to Franchise Agreement (see Attachment 1 to this Notice) be executed by the franchisor and franchisee for each loan involving a franchise or similar agreement;
b) will no longer maintain an internal or external centralized listing of franchise systems where the franchisee is not considered affiliated with the franchisor for size determination (formerly known as the “Franchise Registry”);
c) will no longer maintain an internal or external centralized listing of franchise systems where the franchisee is considered affiliated with the franchisor (formerly known as the “SBA Franchise Findings List”); and
d) will identify the specific franchise of the applicant in E-Tran/SBA One.
Revised Credit Elsewhere Procedures
The lender’s legal lending limit and the fact that the lender’s liquidity depends upon selling the guaranteed portion of the loan on the secondary market were removed from the list of examples of acceptable factors.
More to come later!
Access SBA SOP 5010 5 (I) here
Sign up for Coleman’s webinar — What SBA Lenders Need to Know About the New SOP 5010 (I) Effective Jan 1
Date: Thursday, December 15, 2016
Time: 2:00pm ET – 3:15pm ET