SBA has issued Procedural Notice 5000-858322, 7(a) and 504 loans to Cooperatives and valuation requirements for 7(a) loans to ESOPs for changes of ownership (effective June 24, 2024). The notice revises SOP 50 10 7.1 in several places to:
- Allow 7(a) lenders and CDCs to use their delegated authority to process loans to cooperatives or eligible small businesses owned or controlled by cooperatives; and
- For 7(a) loans, remove the requirement that lenders must obtain independent business valuations for loans involving ESOPs, and substitute language allowing lenders to use valuations obtained by the ESOPs that are made in accordance with the specifications of the Employee Retirement Income Security Act of 1974 (ERISA).
Please see the notice for detailed information regarding the specific language changes made to SOP 50 10 7.1.
