April 30, 2019
By Bob Coleman
Editor, Main Street Monday
SBA Hot Topic Tuesday — Lenders No Longer Can Approve Changes in Ownership for 12 Months After Final Disbursement
SBA Lenders may no longer unilaterally approve any adjustment to or change in the ownership of a Borrower, including a change in percentage of ownership, for 12 months after final disbursement on any 7(a) or 504 loan.
Effective April 1, 2019, such changes require SBA’s prior approval.
The request must include the reason for the change, the details of the requested action, along with the recommendation of the SBA Lender.
In order to obtain SBA’s approval two conditions must be met.
- Ownership changes will not cause a borrower or affiliate to exceed SBA’s loan limits.
- Verification that there has been no prior loss to the Government caused by the new owner(s) or any business owned, operated or controlled by the new owner(s).