SBA Hot Topic Tuesday — SBA 7(a) and 504 Post Shutdown Q&A
February 5, 2019
By Bob Coleman
Editor, SBA Hot Topic Tuesday
SBA Hot Topic Tuesday — SBA 7(a) and 504 Post Shutdown Q&A
The following Q&A has been edited for clarity. Here is the original notice issued last week.
SBA 7(a)
Interim Loans
Q: Can a 7(a) Lender provide an interim loan during an SBA Shutdown and refinance that loan with an SBA-guaranteed loan when a shutdown ends?
A: Yes. For PLP Lenders, an interim loan made within 90 days during an SBA Shutdown may be refinanced PLP if the use of proceeds is for other than real estate construction purposes.
Q: Can a Community Advantage Lender provide an interim loan to a small business during an SBA Shutdown and refinance that loan with a CA loan after a SBA Shutdown is over?
A: Yes. SBA will permit a Community Advantage Lender to submit a request to refinance an eligible interim loan approved and funded during the SBA Shutdown.
The request must be submitted GP and no later than than March 31, 2019 for the latest shutdown
Financial Statements, Appraisals, and Environmental Reports
Q: What happens if the financial statements, appraisal or environmental report included with an application became outdated during an SBA Shutdown?
A: For this shutdown, SBA will accept current financial information, appraisals, and environmental reports received and on or before December 21, 2018.
However, Lenders will be required in the Authorization to obtain updated financial statements as a condition for closing.
Expedited Requests
Q: Can a non-delegated Lender request expedited processing of a loan application?
A: Yes, where the Lender believes a delay in processing would cause a loss to the borrower (e.g., a purchase contract or escrow closing deadline). Lenders may send requests for expedited processing to 7aloanprogram@sba.gov along with a justification for expedited processing and the E-Tran tracking number.
Servicing Actions
Q: What happens to a servicing action entered into E-Tran by a Lender during an SBA Shutdown?
A: Servicing action requests for increases or decreases submitted during an SBA Shutdown were not accepted in the E-Tran system and must be resubmitted.
“Send This File”
Q: How will SBA handle guaranty purchase requests, wrap-up reports, and servicing requests that were submitted to SBA using “Send This File” during an SBA Shutdown?
A: Lenders will need to resubmit any attachment (e.g., guaranty purchase request, wrap-up report, expenses, litigation plan) sent through “Send This File” during an SBA Shutdown
The 2-Year Prudent Liquidation Deadline is extended by 35 days for the latest SBA shutdown.
504 Loan Program
Financial Statements, Appraisals, and Environmental Reports
Q: What happens if the financial statements, appraisals or environmental reports became outdated during an SBA Shutdown?
A: For this shutdown, SBA will accept current financial information, appraisals, and environmental reports received on or before December 21, 2018,
(For purposes of the “No Adverse Change” determination requirements at 504 closing, CDCs are reminded that they are required to submit updated financial statements dated no earlier than 120 days from the date of the 504 loan closing.)
327 Actions
Q: Will 327 actions for undisbursed 504 loans be given priority in processing now that the SBA Shutdown has ended?
A: Yes.
Q: What is the process for a CDC to request expedited processing for 327 actions for 504 applications and servicing requests?
A: Requests for expedited processing of 327 actions and 504 applications will be considered in cases where the CDC believes a delay in processing would cause a loss to the applicant small business (e.g., a purchase contract deadline). Requests should be submitted to sacramento504@sba.gov along with a justification for expedited processing, including relevant contractual documentation.