SBA SOP 50 10 8, B.Ch2.B.3 — Loan Maturities
Verbatim text of SBA SOP 50 10 8 section B.Ch2.B.3 (Loan Maturities), effective 2025-06-01. 3 provision(s) quoted from the SOP PDF. SBA's own document page serves superseded editions, and the SOP is further amended by policy notices — read this with the notices that touch it.
SBA lending corpus: SOP 50 10 and the active notices, with the expiry watcher.
Verbatim regulatory text
Verbatim provisions from SBA SOP 50 10 8, B.Ch2.B.3 — Loan Maturities — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
SOP 50 10 8 B.Ch2.B.3
3. Loan Maturities 13 CFR § 120.212 7(a) loans must have a stated maturity. The loan term must be the shortest appropriate term based on the use of proceeds and the Borrower's ability to repay. i. For 7(a) Small loans and SBA Express term loans, the loan’s term must be: a) Working capital or inventory loans and the financing of intangible assets (including goodwill) must not exceed 10 years. b) Generally, equipment, fixtures, or furniture loans should not exceed 10 years. However, the term may be up to 15 years if the IRS asset class useful life supports the term. The term for a loan to finance equipment and/or leasehold improvements may include an additional reasonable period, not to exceed 12 months, when necessary to complete the installation of the equipment and/or complete the leasehold improvements. c) Real estate loans (including acquisition, rehabilitation, renovation, construction, or improvements to leasehold interests in land) must not exceed 25 years, unless a portion of the loan is used for construction or renovation of the real estate. If the use of proceeds on a real estate loan includes construction or renovation, an additional period reasonably necessary for the construction or renovation period may be added to the 25-year maximum maturity. d) Loans for leasehold improvements (except for leasehold interests in land) may not exceed 10 years, plus an additional period reasonably necessary to complete the leasehold improvements, as determined based on the specific nature of the leasehold improvements, but in no case more than 12 months. e) Mixed purpose loans and loans for all types of changes of ownership: When 7(a) loan proceeds are used for changes of ownership and/or for multiple purposes (land and building, working capital, machinery & equipment), or the refinancing of any of these purposes, the maturity may be a blended maturity or, if 51% or more of the use of the 7(a) loan’s proceeds are for real estate, the maximum maturity may be up to 25 years. For stock purchases, the loan maturity may be based on the underlying assets/interest financed by the 7(a) loan as supported by a business valuation/appraisal. f) For loans to farm enterprises:
SOP 50 10 8 B.Ch2.B.3.i
i) Where land and structures (including poultry houses) for farming comprise 51% or more of the use of proceeds, the maximum maturity is 20 years. ii) Where machinery and equipment comprise 51% or more of the proceeds, the maximum maturity is the useful life of the machinery and equipment, not to exceed 15 years, plus an additional period reasonably necessary for installation, which may not exceed 12 months. ii. SBA Express lines of credit: a) May not exceed 10 years inclusive of a term-out period. b) Revolving loans:
SOP 50 10 8 B.Ch2.B.3.i.i
i) Revolving loans of more than 12 months must be structured with a term-out period that is not less than the draw period, with no draws permitted during the term-out period. Under no circumstances may there be any advances after the initial 60 month period. For example, the loan can have an 8 year maturity with a 2 year draw period and a term-out period of 6 years. Conversely, a loan with an 8 year maturity cannot have a draw period of 6 years and term-out period of 2 years. ii) May be established as renewable each year, provided they do not exceed the maximum maturity. Lender may not charge a renewal fee. If the original maturity was for 12 months or less, and the new maturity exceeds 12 months, an additional guaranty fee will be due. See Section A, Ch. 4, Para. C.1.a.v., Additional Guaranty Fee for Extensions of Short-Term Loans. iii) Revolving loans with maturities of 12 months or less may be initially structured without a term-out; however, if the loan is renewed or the maturity extended beyond 12 months, the requirements in Paragraph b)i) above will apply. 4. SBA Express Non-Financial Default Provisions: Non-financial default provisions are allowed under SBA Express under the following conditions: Non-financial default provisions are loan conditions that, if violated, would cause the loan to be in default even though the Borrower has made all payments as agreed. Non-financial default provisions must be substantive and must be agreed to by the Borrower in writing at loan closing; The provisions must be consistent with those used by the Lender on its similarly- sized non-SBA guaranteed commercial loans; A lender may not request purchase of the guaranty solely based on a violation of a non-financial default provision (see 13 CFR § 120.520); and A maturity date must be established in the note. For example, a line of credit could state that it is payable upon demand under certain conditions, but in no case later than a certain date.
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Source of record: https://claudeforcompliance.com/regs/sba-sop-b-ch2-b-3/
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