SBA SOP 50 10 8, C.Ch1.C.8 — Contingency Fund
Verbatim text of SBA SOP 50 10 8 section C.Ch1.C.8 (Contingency Fund), effective 2025-06-01. 2 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 SBA's own document page serves superseded editions, and the SOP is further amended by policy notices — read this with the notices that touch it.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, C.Ch1.C.8 — Contingency Fund — 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.C.8
8. Contingency Fund May not exceed 10% of the Project construction costs: If the residual contingency amount does not exceed 2% of the debenture just prior to closing, it may be refunded to the small business at the time the debenture is funded. If the contingency residual is in excess of 2%, the debenture has to be reduced by the excess amount.
SOP 50 10 8 C.Ch1.C.9
9. “Do-it-yourself” Construction “Do-it-yourself” construction, including renovations, and/or installation of machinery and equipment, or situations where the Applicant acts as its own contractor have proven to be generally unsatisfactory and can cause problems with lien waivers and mechanics liens, causing potential losses to lenders and/or SBA. “Do-it-yourself” construction, including renovations, (e.g., installation of carpeting or painting) and/or installation of machinery and equipment may be permitted, if the CDC can justify and document in the loan file that: The Borrower/contractor is experienced in the type of construction and has all appropriate licenses; The cost is the same as, or less than, what an unaffiliated contractor would charge as evidenced by two bids on the work; and The Borrower/contractor will not earn a profit on the construction.
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Source of record: https://claudeforcompliance.com/regs/sba-sop-c-ch1-c-8/
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