New SBA Forms 1919, 1920, 1971, 2237 Compliance with SOP 50 10 6

On November 3, 2020, the SBA announced the update and release of SBA Form 1919 (Borrower Information Form), SBA Form 1920 (Lender’s Application for Loan Guaranty), SBA Form 1971 (Religious Eligibility Worksheet), and SBA Form 2237 (7(a) Loan Post Approval Action Checklist).

SBA Lenders are required to use the revised forms immediately in order to be compliant with the SOP 5010 6.

Sign up for Coleman’s new webinar “SBA Forms 1919, 1920, 1971, 2237 Compliance with SOP 50 10 6” to ensure your institution is up to date on the proper way to complete these forms.

Here are the changes in the new forms:

SBA Form 1919

• Clarified the instructions for how to complete the form and who must complete each section.
• Added selection boxes to clearly identify if the Applicant is organized as a Cooperative, Employee Stock Ownership Plan (ESOP), 401(k) Plan, or Trust.
• Expanded the purpose of the loan section to better document the intended allocation for the uses of proceeds, such as purchase real estate, construction, eligible debt refinancing, and working capital.
• Added a question to determine if the Applicant’s source of equity is a 401(k) plan (including a Rollover for Business Start-Up plan).
• Added a question asking if the Applicant is going to hire a management company to manage day-to-day operations of the business. (If so, the Applicant must provide a copy of the management agreement to the Lender.)
• To enhance the user experience and reduce the time to complete the form, the responses to questions 12-16 have been changed from “True/False” responses to “Yes/No” responses.
• The Representation(s) and Certification(s) have been updated to comply with Federal, State, or local law. This includes a new certification for compliance with the “Taxpayer First Act,” which states the Lender can use and share the tax information, provided by the Applicant and/or that the Lender obtained from the Internal Revenue Service with SBA for the purpose of compliance with SBA Loan Program Requirements and all SBA reviews.
• Changed Principal Name to “Individual Owner’s Full Legal Name” to clarify who is required to complete this section. (As discussed below, entity owners will complete the newly created Section III.)
• Added line for “Applicant Legal Name.”
• Added “must be originally initialed or digitally verified, and not typed” to questions 17-20 to clarify the acceptable format for the individual’s initials.
• As part of the Agency’s efforts to reduce and streamline forms, deleted the requirement for an individual owner to complete SBA Form 912, Statement of Personal History, when the individual answers “yes” to question 18 or 19. Although the SBA Form 912 is no longer required, if an individual owner answers “yes” to question 18 or 19, the individual must provide the details to support the affirmative answers to the SBA Participating Lender for processing in accordance with SOP 50 10 6, Part 2, Section A, Chapter 3, Paragraph B, Character Determination.
• Added language after question 20 to reflect SBA Loan Program Requirements related to the eligibility of businesses owned by non-U. S. Citizens.
• Added a section to collect information on the entity owners of the Small Business Applicant.

SBA Form 1920

• Revised the titles of boxes for the Lender to identify the processing option (delegated or non-delegated) and all of the delivery method options for 7(a) loans (e.g., 7(a) Small, SBA Express, Export Express, EWCP, International Trade, CAPLines, Community Advantage).
• Added an option for 7(a) Small Loan of $350,000 or less that does not meet the minimum acceptable FICO® Small Business Scoring Service credit score.
• Added Permanent Working Capital and Fixed Assets options for International Trade Loans.
• Added the following options for EWCP Loans: Revolving, Not Revolving, Asset Based, Transaction Based, Standby Letter of Credit, and Renewal/Reissuance.
• Moved Section B of the 1920.
• The option for the SBA LIBOR base rate has been removed, as LIBOR is being phased out of use. In addition, revised the wording of Fixed Base Rate to Fixed Rate.
• Payment frequency: monthly, quarterly, semi-annually, annually, and other options have been added for consistency with data entry options in E-Tran and SBA One.
• Added options for uses of proceeds to capture EWCP and Export Express programs: Export Working Capital (EWCP or Export Express), Support Standby Letter of Credit (EWCP or Export Express), and Refinance Existing EWCP Loan or Export Line of Credit.
• Added a question asking if any portion of the Applicant’s equity injection will be funded by a Rollover as Business Start-Up (ROBS) plan.
• Expanded the General Eligibility section to include a statement confirming the Lender has reviewed the SBA Loan Program eligibility requirements and the Small Business Applicant is eligible.
• Removed section L.
• Revised the International Trade (IT) Loan and Export Express (EE) sections for consistency with updated SBA Loan Program Requirements in SOP 50 10 and, for EE, to incorporate the Lender’s compliance with OFAC review requirements.
• Because the EIB-SBA Joint Form 84-1 is no longer used for EWCP loans, revised the EWCP section to include questions formerly contained in EIB-SBA Joint Form 84-1.
• Changed lender credit memo submission requirements.

SBA Form 1971

• Revised for clarity.
• Added the signature of the Applicant and removed the recommendation and signature of the processing center or local SBA Counsel.

SBA Form 2237

• Added a section for instructions following the section for the Lender’s contact information. The instructions provide guidance to the Lender in providing details of loan modification requests to the appropriate SBA Loan Center.
• Removed check boxes for unilateral actions and actions that lenders are required to update in E-Tran, as these actions do not need SBA approval. Lenders should only use this form for actions that require SBA approval.
• For modifications to International Trade and Export Express loans, Lenders continue to utilize this checklist. For EWCP loans, Lenders will continue to request changes through the appropriate Export Finance Trade Manager, who will submit the request to the Loan Guaranty Processing Center, unless the changes are within the Lender’s delegated PLP-EWCP authority.