Article by Roger Schlueter
The SBA Rules and Regulations are voluminous and complicated. The SBA SOP (Standard Operating Procedure) is 401 Pages and is only about the Application and Eligibility and does not include Servicing and Liquidation. The SOP is also updated at least once each year which makes knowledge of the SOP very hard to keep up with. I print the SOP out in it’s entirety every time it is updated so I will have all the current information. I find it is easier to look and flip through a binder than look at a small computer screen.
I have found even people with knowledge of the SBA sometimes become mistaken when certain issues come up, that need some sort of ruling in order to proceed with the project. Even if the SBA states an issue that needs to be complied with or an issue that needs to be addressed, you need to check out the validity of the issue before you change or drop your plans. Most SBA employees are very knowledgeable but sometimes you find that the answer is wrong or not addressing your situation. I have even received three different answers to a question from three different SBA employees.
I will usually look my question up in the SBA SOP and then Email the office in Sacramento California because that is where they do the Processing for this area. I will also call the St. Louis office because I know several of the workers at that office. Emailing is hard because you cannot ask a followup question. I will then see if I get some correlation of the answers and hopefully be satisfied with the answers and proceed with my loan.
I recently had the SBA stop Processing a SBA 7a Loan because they said my refinance of a loan needed an additional benefit to the borrower and quoted the SOP Pages that were used in the determination. My loan was a Line of Credit and as such did not need to show a benefit to the borrower. I really had to stop short and not respond badly when telling my banker what to say in response.
The SOP can be found on line at www.sba.gov then you want to type in the search bar at the top of page – SOP and click SEARCH. Click on Standard Operating Procedures (SOPs) and Guides | sba.gov – Then Click on VIEW LENDERS SOPS – Then click on the SOP # which is 50 10 5(E) – this is the latest SOP. Pick the Clean or the SOP with the Track Changes. I would pick the clean.
There You Go !!!!
The SOP’s Index is just that, an index. The index is hard to use because it is not broken into enough subsections, but it is usable. It is broken into three sections, A, B, and C. The A section is for Lender Issues, the B section is for the SBA 7a / Guarantee Program and the C section is for the SBA 504 Program. When banks ask the SBA for Assistance the SBA personnel always ask if they have looked it up in the SOP. This is the SBA’s Bible of sorts and is usually the final say on any lending issue.
Please address any questions or comments to the Blog at roger@rogerschlueter or for additional contact info go to my website at schlueterfinancial.com