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SBA Hot Topic Tuesday – New CDC Rules, Goodbye Personal Resources Test

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March 25, 2014

By Bob Coleman
Editor, Coleman Report

FederalRegister032514SBA’s long awaited rule of eliminating the “Personal Resources Test” has finally been published.

Beginning April 21, SBA lenders will no longer be required to complete the formula to determine if a borrower holds more than enough money than a SBA borrower should.

This is a reasonable change by SBA to streamline its regulations. The “credit elsewhere” rule now will determine if a borrower has “too much” liquidity and could be accommodated by conventional loan products.

Many changes to CDC governance have also been implemented.

SBA has decided against revamping the affiliation rules. So, those remain in effect.

Check out the new rules here.

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