NEWS FLASH: U.S. SBA Loan Program By Any Other Name…

If you haven’t gotten used to the new names for the SBA’s 7(a) and CDC programs, don’t worry. One of the first moves by the new U.S. Small Business Administrator appointed by President Trump was to rescind last year’s decision to rebrand the agency’s flagship lending programs.

Last week, SBA Administrator Linda McMahon issued an information notice that the “SBA Grow Loan Program” and the “SBA Advantage Loan Program” are returning back to the 7(a) Loan Program and the 504 Loan Program, effective immediately.

It was last fall that the SBA announced plans to rebrand the two lending programs to “better reflect their purposes and improve borrower understanding of SBA’s programs.” Yet the name changes were “extremely unpopular” with the industry. According to a Coleman Report survey, 81% disapproved of “Advantage Loan Program,” and a more significant 92% disapproved of the “Grow Loan Program” name.

SBA Lending Status

Based on the latest stats available directly from the SBA, 7(a) loan volume (as of March 10th, by number of loans) was down by a modest five percent compared to this time last year.  By dollar volume, however, lending increased by nine percent year on year. Likewise, 504 lending year to date was up by eleven percent almost two quarters into FY17.

Reminder: New SOP Version (I)

Lastly, a reminder for any commercial real estate lenders who participate in SBA lending—and the environmental consultants who support them: SOP 50 10 5(I) took effect January 1st and should now be referenced in all loan documentation. Version (I) supersedes version (H) and is the 9th version of the policy document that lenders and Certified Development Companies must follow to qualify for an SBA loan. While version (I) included new guidance for franchised businesses, the environmental requirements remained largely unchanged. The red line version of  the new SOP 50 10 5(I) is available hereEDR’s flowchart illustrates the tiered approach of an environmental investigation under the SBA’s environmental policy, an approach that has been widely adopted by lenders even for non-SBA lending.