SBA SOP 50 10 8, C.Ch1.B.2 — Interim Financing

sba-sop-c-ch1-b-2

Verbatim text of SBA SOP 50 10 8 section C.Ch1.B.2 (Interim Financing), effective 2025-06-01. 1 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 SBA's own document page serves superseded editions, and the SOP is further amended by policy notices — read this with the notices that touch it.

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See also

SBA lending corpus: SOP 50 10 and the active notices, with the expiry watcher.

Verbatim regulatory text (1)

Verbatim provisions from SBA SOP 50 10 8, C.Ch1.B.2 — Interim Financing — 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 C.Ch1.B.2

Effective 2025-06-01 · publisher's stamp for this provision

2. Interim Financing Loans under the 504 program provide permanent or take-out financing (see Ch. 2, Para. C.2. Escrow Closing, below in this Section, for the requirements of an escrow closing with no interim loan). An interim lender (either the Third Party Lender or another lender) provides the interim financing to cover the period between SBA approval of the project and the debenture sale. After the project is completed, the CDC will close the 504 loan. The proceeds from the Debenture sale repay the interim lender for the amount of the 504 project costs that it advanced on an interim basis. Any experienced, independent source including the Third Party Lender may supply interim financing provided they meet the conditions described in 13 CFR § 120.890. A CDC may provide interim financing but only for a project financed by another CDC. As stated in the regulation, neither the Borrower nor an Associate of the Borrower may supply interim financing. If the Third Party Lender provides the interim loan, it may do so using: i. An interim note which will be paid in full with the net debenture proceeds and a permanent note; or ii. A single note, which includes both the interim and permanent financing that will be reduced by the net debenture proceeds. Example of Interim Financing of Eligible Project Costs Expenses Incurred Prior to the 504 Application: Purchase of Land (Principal portion of short-term financing) $180,000 Equity in Land 20,000 Purchase of M & E 100,000 Cost estimates submitted at time of application: Construction of Building 600,000 Total Project Costs 900,000 Permanent Financing Structure: First Mortgage Lender 50% 450,000 504 Net Proceeds 40% $360,000 Borrower Equity 10% $90,000 Total Financing 100% $900,000 In this example the interim loan would be $810,000. The Borrower cannot be reimbursed directly from the net debenture proceeds, but the lender can refinance these with an interim loan at any time prior to the loan closing.

Source: SBA SOP 50 10 8, C.Ch1.B.2 — Interim Financing · source URL · snapshot 535743ffe062cc34

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Source of record: https://claudeforcompliance.com/regs/sba-sop-c-ch1-b-2/ · register sba-sop-c-ch1-b-2 · verbatim, source-snapshotted regulator text from the Claude for Compliance corpus. To work from every register at once, download the corpus and follow the methodology.