March 2, 2017

By Bob Coleman
Editor, SBA Hot Topic Special Edition

SBA Hot Topic Tuesday Special Thursday Edition! SBA 504 Refi is Back! New SBA Franchise Forms Available.

Yesterday’s reporting that the House Small Business Committee wants to eliminate SBA 504 debt refinancing is being disputed by NADCO.

NADCO’s CEO B Vohryzek writes, “You may have seen a report that the House Small Business Committee is eliminating the debt refi program. This is not accurate. Unfortunately, the House published an old section of their budget review, from a time prior to their support and ultimate successful passage of debt refi. The program remains active with no plans on the Hill to change this.”

As promised, here are the links for the new SBA franchise forms.

SBA Form 2462 — Franchise Addendum (2-17)

SBA Form 2463 — Franchisor Certification (2-17)

SBA Notice 5000-1941 — Changes to the Franchise Review Process for 7(a) and 504 Loans (2/14/17)

SBA Form 2462 (Franchise Addendum)

The following changes have been made to the SBA Addendum to clarify SBA’s intent:

a) The SBA Addendum now includes a drop down box to allow the entity to select the appropriate type of agreement (e.g., franchise, license, jobber), and the proper titles of the parties to the agreement (e.g., franchisor/franchisee, licensor/licensee). The SBA Addendum will also allow the manual entry of other types of agreements (e.g., member agreements), or to fill in a specific name of an entity, rather than “franchisor.”

b) The language under the heading “Covenants” has been clarified to address any restrictions that may already be recorded against the franchisee’s real estate. Any such restriction must be removed from the title in order for the Franchisee to obtain SBA-assisted financing.

c) The language under the heading “Employment” has been revised to clarify that for temporary personnel franchises, the temporary employees will be employed by the Franchisee not the Franchisor.

d) The language regarding termination of the SBA Addendum has been clarified.

e) The signature blocks have been revised to include language stating the persons signing the SBA Addendum are authorized to do so.

SBA Form 2463 — (Franchisor Certification)

The SBA Negotiated Addendum must be an addendum that was developed by SBA and the franchisor in connection with either a 2015 or 2016 version of a franchise agreement. If the franchisor does not have an SBA Negotiated Addendum with a 2015 or 2016 date, this certification alternative cannot be used and the lender must obtain the SBA Addendum.