Underwriting SBA 7(a) Small Loans After SBSS:  What Lenders Must Change by March 1, 2026 — 2/12

A Coleman Training Webinar
Date: Thursday, February 12
Repeated: Tuesday, February 24
Time: 2:00 p.m. Eastern

Unlimited site registrations may attend either or both sessions for the same fee. Both training sessions are “live” events.

The SBA has changed the underwriting rules for 7(a) Small loans under $350,000. Effective March 1, 2026, the SBA is ending the use of the SBSS score for all 7(a) Small loans and returning to the requirement for documented repayment ability based on cash flow. 

This is “not a do what you already do” approach, says SBA.

This change requires lenders to adjust their underwriting practices, documentation and credit memorandums to ensure payment of the SBA loan guaranty in the event of default. 

SBA will require lenders to evaluate repayment ability of SBA loans less than $350,000 based on historic cash flow and debt service coverage using the most recent year end financials and two months of bank statements. Lenders must demonstrate coverage of at least one times debt service when including the proposed SBA loan. Internal scoring models may still be used for credit history but they cannot satisfy the repayment requirement.

This Coleman webinar introduces the nuances of SBA demands. From the new 60-day bank statement requirements to when you must decline a loan even if there is historical positive cash flow.

These changes affect all non Express 7(a) Small loans regardless of size under $350,000. Lenders must update credit policies and underwriting templates to reflect the statutory repayment requirement. 

The training in this webinar shows how SBA expects underwriters to evaluate files, how to document repayment ability and where lenders can apply common sense judgments without creating SBA denial of guaranty risk. 

What You Will Learn

• Understand how SBA defines repayment ability using cash flow and the required debt service coverage calculation.
• Learn what to include from income statements, tax returns and two months of bank statements to support coverage.See how SBA examiners treat projections and what documentation is required when historic coverage falls below 1:1.
• Know what documentation is necessary in the credit memorandum to satisfy SBA.
• Determine how to apply internal scoring models for credit history without substituting for repayment ability.
• Gain clarity of SBA’s expectation to uncover merchant cash advance loans and one time deposits in underwriting.

Benefits for Your Lending Team

• Improve underwriting consistency for 7(a) Small loans with a documented, cash flow based approach.
• Reduce risk of SBA exam findings by knowing exactly what documentation SBA examiners expect to see.
• Increase approval certainty by aligning your credit memo and file documentation with the new SOP requirements.
• Enhance credit officer confidence in making better risk decisions using coverage and bank statement analysis.
• Streamline underwriting procedures with clear steps for coverage calculation and bank statement review.
• Ensure compliance with SBA statute and policy while still maintaining a practical and efficient process.
• Position your lending team ahead of competitors who have not yet adapted to the new repayment ability requirement.

---

Your Training Instructor

Lance Sexton
Lance Sexton brings unmatched expertise to SBA servicing and liquidation training. A former small business owner himself, Lance understands firsthand the challenges lenders and entrepreneurs face. He has more than 40 years of experience in SBA lending, including 20 years directly managing portfolios of SBA loans.
Lance served as Deputy Director of the SBA’s Little Rock Servicing Center, giving him unique insight into how the Agency views compliance, servicing, and guaranty purchase. He has personally overseen SBA loan portfolios worth billions, and today he serves as Executive Vice President and Managing Director of Servicing and Liquidation at Phoenix Lender Services.
Lance is also an award-winning educator, having earned three national industry awards for “Best Online Learning Product.” He is an adjunct faculty member at the University of the Ozarks and has been affiliated with Coleman Publishing for over 11 years, where he has trained thousands of SBA professionals nationwide.

By the Numbers
– Personally involved in more than 500 SBA 7(a) guaranty purchase cases totaling over $500 million
– Serviced portfolios for more than $2 billion in SBA 7(a) loans
– Managed servicing, liquidation, and guaranty purchase for over $4 billion in PPP loans
– 40+ years of SBA lending and servicing expertise

---

How the Webinar Works

We use Microsoft Teams as the webinar platform. All Coleman webinars are recorded and a link is sent to all attendees.

Single Site License
The single site license grants your institution one viewing of the webinar. It is permissible to use a single site license on one device in a conference room to be viewed by multiple attendees The webinar can be viewed on any device.

Webinar Links and Handouts
The webinar link will be included when we distribute the presentation and handouts shortly before the webinar.

Participants Earn Certificates of Participation
All Coleman Webinar attendees will receive a certificate of participation. This documents your continuing education history for SBA and your regulators.

Questions
Questions throughout the webinar are strongly encouraged. There are two ways to ask a question. The first is to ask the question via the chat in Microsoft Teams. The second is to send an email to anna@colemanreport.com. Also, feel free to ask pre and post-webinar questions.

The Fine Print
1) Substitutions are allowed at no charge.
2) Cancellations receive a 100% credit for any Coleman product.
3) As with all our products, we offer a 100% money back satisfaction guarantee — no questions asked.

3 Easy Ways to Order

1) ONLINE — Register and pay online via QuickBooks
2) EMAIL –Send an email to cindy@colemanreport.com with “Webinar Registration” in the Subject Line. We will do all the paperwork and either send you a sales receipt or an invoice.
3) PHONE — Call us at 818-790-4591.

Bob Coleman
Publisher, Coleman Report
bob@colemanreport.com