April 2, 2013
With the April 26th deadline approaching, SBA’s proposed rule changes are still garnering some attention in the media.
Check out this San Fernando Valley Business Journal story discussing how the elimination of the personal resource test is a good paperwork reduction move given the credit elseswhere test will apply.
Writes Mark Madler, “The elimination of the Personal Resource Test, which looks at the personal assets of the borrower, will likely affect the most people. A borrower whose personal wealth was too high under SBA guidelines would not be eligible to receive a 504 or 7(a) loan.
“But having that requirement was like penalizing the owner for doing the right thing of being liquid and responsible, said Antonio Pizano, director of business development at Valley Economic Development Center, a Sherman Oaks nonprofit lender.
“By eliminating that (test) it opens doors for more small business owners,” Pizano said.
“Borrowers, however, still must pass the ‘credit elsewhere’ test, which also uses personal assets to calculate if a borrower is likely to get a traditional loan not backed by the SBA, said Bob Coleman, editor of the Coleman Report, a La Canada-based SBA lending industry newsletter.”