February 15, 2017
By Bob Coleman
Editor, C-Suite Wednesday
C-Suite Wednesday — SBA Enhances Franchise Review Process
The bottom line is there are two changes you need to know in underwriting and closing SBA 7(a) and 504 loans to franchisees.
1) The franchise addendum has been updated and should be used for all loans approved after February 14, 2017.
2) If the franchisor is unwilling to sign the addendum, (e.g. Dunkin Donuts), you may obtain alternate paperwork. There are two requirements. a) SBA had previously approved the franchise agreement in 2015 or 2016 and b) the franchisor must sign SBA form 2463 certifying the approval.
Both forms are not yet on SBA’s website. I will send them to you when when available.
P.S. Whether it was an oversight, or telegraphing a change in policy, I note there is no reference to SBA Advantage or Grow loans. The notice refers to the historical names of the SBA 7(a) and 504 loan programs.
Be sure to participate in our Franchise Underwriting Webinar, Wednesday, March 8 @ 2 p.m. Eastern