SBA SOP 50 10 8.1, App14.B.4 — Working Capital CAPLine:

SOP 50 10 8.1 App14.B.4

Effective 2026-10-01 · publisher's stamp for this provision

4. Working Capital CAPLine: a. All debt refinancing requirements for Working Capital CAPLines are set forth above with the following exceptions: i. Proceeds from a Working Capital CAPLine may only refinance existing short-term revolving debt under the following conditions: a) The short-term revolving debt must be terminated after it is paid off with the CAPLine; b) Depending on whether the CAPLine will be disbursed based on a Borrowing Base Certificate (BBC) or not, the Borrower has either a borrowing base or collateral sufficient to support the Working Capital CAPLine plus any other short-term debt that is not being refinanced; c) If the application includes the refinancing of same-institution short-term revolving debt, and if the Applicant defaults on the SBA-guaranteed Working Capital CAPLine within 90 days of initial disbursement, there will be a presumption that the loan proceeds were used to pay a creditor in a position to sustain a loss causing a shift of all or part of the loss to SBA in violation of 13 CFR § 120.201 and SBA may deny liability on the guaranty; d) The loan should be secured with at least the same collateral and lien priority as the debt that is being refinanced. However: i) When the current balance of the debt being refinanced is considered over collateralized relative to SBA collateral requirements and the SBA loan will remain fully secured, the Lender is not required to take the excess collateral. ii) Substitute collateral may be taken to secure the new loan if it is of comparable value and useful life and is determined to be acceptable by SBA or the Lender under its delegated authority.

Source: SBA SOP 50 10 8.1, App14.B.4 — Working Capital CAPLine: · source URL · snapshot 0fb0c4692cf52938