SBA issued Procedural Notice 5000-846991, Implementation of Removal of the Loan Authorization in accordance with the Final Rule on Small Business Lending Company (SBLC) Moratorium Rescission and Removal of the Requirement for a Loan Authorization (88 FR 21890, effective May 12, 2023) (notice effective May 9, 2023). The notice amends SOP 50 10 6 to remove the requirement for loan authorization for both the 7(a) and 504 programs for all applications received by SBA on or after May 12, 2023.
Per the notice, as a substitute for the loan authorization, SBA and lenders “will use the terms and conditions entered in E-Tran as the agreement between SBA and the SBA Lender stating the terms and conditions under which SBA will guarantee a business loan or issue a debenture”. The notice indicates that, for 7(a) loans, the terms and conditions that must be submitted through E-Tran include:
- Lender fees (upfront and annual service fee)
- Repayment terms
- Uses of proceeds
- Guarantors
- Collateral
Please see the notice for more detailed information on 7(a) changes and for information regarding the changes that apply to 504 loans.
