Waiting for Financial Statements Is Not an SBA Loan Servicing Strategy

July 7, 2026

Bob Coleman
Founder & Publisher

Waiting for Financial Statements Is Not an SBA Loan Servicing Strategy

One of the most common servicing mistakes occurs during the annual review.

The lender requests year-end financial statements and tax returns. The borrower promises to send them. Weeks pass. The documents never arrive. The annual review sits unfinished while the lender waits.

So what to do?

Lance Sexton observed during a recent Coleman webinar, “Our annual review process doesn’t stop because the borrower does not provide a financial statement. We look at other things.”

SBA requires participant lenders to service SBA loans no less diligently than similarly sized non-SBA commercial loans. The standard is not whether the borrower cooperates. The standard is whether the lender continues to monitor the credit using prudent commercial lending practices.

Financial statements are only one part of that process.

A current credit report may identify deteriorating payment performance or new debt. Business bank statements often provide a more current picture of borrower activity than year-end financial statements. UCC searches confirm lien priority. Site visits verify the business remains in operation and that collateral still exists. Insurance coverage, tax liens, and collateral values should all be reviewed as part of the annual assessment.

Every request for financial information should be documented. Every phone call, email, site visit, and servicing decision belongs in the loan file. If the borrower refuses to provide financial statements, document the refusal and the alternative steps taken to evaluate the credit. Lance advised, “Document it. Write a memo. Put it in a file. Indicate that the borrower refused to provide the requested financial information.”

SOP 50 57 4 also provides another option that many lenders overlook. Chapter 3.E.2(d) permits lenders to charge a separate extraordinary servicing fee for obtaining past due financial statements, provided the fee is consistent with what the institution charges on similarly sized non-SBA commercial loans. The fee should be established in the lender’s policy, disclosed in the loan documents, and communicated to the borrower at closing. SBA also permits lenders to condition future servicing actions on the borrower’s submission of overdue financial statements.

Continue evaluating the credit using all available sources of information, document the actions taken, and keep the servicing process moving.

As Lance says, “Always act like a commercial lender. I know SBA lending is different, but so much of the SBA SOP 50 10 and 50 57 refers to prudent lending standards. And SBA expects us to service our SBA loans the same way we would similar-sized non-SBA loans.”