C-Suite Wednesday – Updated SOP 50 10 7 To Be Published Before August 1
July 12, 2023
Delaney Sexton
Contributing Editor
C-Suite Wednesday – Updated SOP 50 10 7 To Be Published Before August 1
During the 7(a) Connect Quarterly update, SBA announced they will be publishing a technical update to the SOP 50 10 7 which will replace the first version. The updated version of the SOP 50 10 7 will take effect on August 1 and apply to all applications received on that date or after. The update will be accompanied by an Information Notice.
They also announced they will be releasing updated forms including an improved and simplified Form 1919, but these forms will be unavailable until after the effective date of the new SOPs. Until updated forms are provided, lenders should continue using the currently available forms.
Some of the changes in the SOP 50 10 7 that were discussed include the following:
Individuals that are incarcerated, on probation, on parole, or under indictment for any felony or financial misconduct crimes will cause the business to be ineligible for a 7(a) loan. The requirement for Character Determination for these individuals has been removed as a result. SBA also removed language that prohibited using loan proceeds for religious activities and removed the requirement for the Religious Eligibility Worksheet.
For agents, lenders will only be required to conduct a SAM Exclusions search once before the agent’s first day of work on SBA-related business.
Lenders can charge a flat fee of up to $2,500. Fees of $2,500 or less must be reported in E-Tran, and the Form 159 must be used to report fees over $2,500. Now, lenders can charge fees for technology services used during the preparation of SBA loan documents, underwriting, or closing of the 7(a) loan. Entities that provide technology services need to be under an SBA-reviewed LSP Agreement.
Fees that are charged hourly must be reasonable and customary for the services performed. If they are charged based on a percentage of the loan, they may not exceed the following:
- Loans $150,000 or less: 5%
- Loans above $150,000: 3%
- The maximum fee when charging on a percentage basis is $30,000
Watch the Coleman Report preshow and SBA 7(a) Quarterly Connect Call here!