SBA SOP 50 10 8.1, App20.A — General Requirements

SOP 50 10 8.1 App20.A

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

A. General Requirements 1. Contents of Lender’s Application for Guaranty & Submission to SBA Regardless of the processing method, all 7(a) loan files must include the forms and information the Lender requires in order to make an informed credit decision. Program forms can be found at www.sba.gov/document. Centralized 7(a) Loan Submission Instructions can be found at the 7(a) Loan Guaranty Processing Center ("LGPC") website at Loan Guaranty Processing Center (Citrus Heights, CA and Hazard, KY) | U.S. Small Business Administration. Lender must submit to the SBA Loan System all terms and conditions required by the SBA Loan System data fields. Lender must list in the SBA Loan System 100% of the total direct and indirect ownership of the Applicant. The ownership percentages of all listed owners must equal 100%. SBA Form 1919 includes information on the number of existing employees at the time of application and the number of jobs to be created and/or retained as a result of the loan.  Number of existing employees at the time of application is calculated in accordance with 13 CFR § 121.106, which states in part that SBA counts all individuals employed on a full-time, part-time, or other basis (i.e., jobs are not converted to full-time equivalents).  Jobs “created” means the number of full-time (or equivalent) employees that the small business expects to hire as a result of the loan.  Jobs “retained” means the number of full-time (or equivalent) employees on the payroll of the business at the time of application that will be lost if the loan is not approved.  “Employees” does not include contractors reported via IRS Form 1099. For all loans submitted using the Lender’s PLP delegated authority, Lender must submit the information required in SBA Form 1919 and the loan terms and conditions into the SBA Loan System. The Lender must obtain and retain in its file all documentation listed below. For all loans submitted using the non-delegated process through the LGPC, the Lender must submit applications for guaranty and all attachments via the SBA Loan System to SBA. SBA will make the final determination as to the eligibility and creditworthiness of the Applicant, including approving the uses of proceeds, the adequacy of the collateral being pledged, the structure of the loan, and any equity contribution to be required from the Applicant. SBA will either approve or decline the loan in the SBA Loan System. The Lender must obtain and retain in its file all documentation listed below. In addition, Lender must submit as part of the application for guaranty those items below emphasized in bold. a. SBA Form 1919: A separate SBA Form 1919 for each Co-Borrower must be completed and signed by the authorized representative of the Applicant and submitted to the Lender. The aggregate amounts of the “Purpose of the loan” sections across all SBA Forms 1919 should equal the total amount of the loan request. Only the information required on SBA Form 1919, and not the form itself, must be submitted into the SBA Loan System, although the Lender must obtain and retain the signed form in its file. b. Lender’s Credit Memorandum must address all requirements detailed in the Credit Standards Paragraph for the applicable loan program Chapter. c. Owner Financial Statement for all owners of 20% or more (including the assets of the owner’s spouse and minor children), and proposed guarantors, except Supplemental Guarantors, Lenders may use SBA Form 413 or their own equivalent form signed and dated within 90 days of submission to SBA. Business financial statements must be dated within 120 days of submission to SBA. d. Tax transcripts in accordance with Section A, Ch. 5, Para. B, IRS Tax Transcript/Verification of Financial Information and either business financial statements or tax returns for the last 3 years and interim financial statements for the Applicant and any affiliates. For start-ups, new businesses, and other applications based on projections, include detailed projections, including the supporting assumptions that reflect a debt service coverage equal to or greater than 1.15 within 2 years from loan funding or, for construction projects, within 2 years from the end of construction. Interim financial statements must be dated within 120 days prior to submission to SBA. The following information must be provided: i. Year End Balance Sheet for the last 3 years, including detailed debt schedule; ii. Year End Profit & Loss Statements for the last 3 years; iii. Interim Balance Sheet, including a detailed debt schedule, and interim Profit & Loss Statements. e. Copy of Lease, if applicable; f. Detailed listing of machinery and equipment to be purchased with loan proceeds and cost quotes, if applicable; g. A detailed listing of all assets purchased with loan proceeds; h. A detailed listing of all collateral; i. Franchise: For any Applicant operating under a franchise, license or similar agreement, refer to Section A, Ch. 1, Para. G., “Franchises”. j. Provide the following if real estate is to be purchased with loan proceeds: i. Appraisal (See appraisal requirements in Appendix 19 Para. A.1.g. Commercial real estate appraisal requirements; ii. Copy of signed purchase agreement; iii. Lender’s environmental questionnaire (if applicable – see Section A, Ch. 5, Para. E, Environmental Policies and Procedures); and iv. Cost breakdown where improvements to the real estate are included; k. Provide the following if purchasing an existing business with loan proceeds: i. Copy of buy-sell or purchase and sales agreement; ii. Copy of business valuation that meets the requirements in Appendix 15 Para. C.1.a. Business Valuation Requirements - Change of Ownership; iii. Pro forma balance sheet for the business being purchased as of the date of transfer; iv. Copy of seller’s financial statements for the last 3 complete fiscal years or for the number of years in business if less than 3 years. The financial statements must be dated and either signed or certified by the seller within 120 days prior to submission to SBA; and v. Seller’s interim financial statements no older than 120 days from date of submission to SBA. The financial statements must be dated and either signed or certified by the seller. If seller’s financial statements are not available, the seller must provide an alternate source of verifying revenues. If seller’s financial statements are not available, Lender must discuss in its credit analysis: a) Why financial statements are not available; and b) How the Lender verified business revenue. vi. All documentation required in Appendix 15: 7(a) Changes of Ownership, para D. Submission of application for guaranty l. Debt Refinancing. Lenders must maintain copies of all notes being refinanced, security agreements, leases, transcripts for the most recent 12 months (to prove debt being refinanced is current) or other documentation evidencing the debt to be refinanced in the loan file. For non-delegated loans, Lender must submit copies of all these documents for the debt to be refinanced to the LGPC with the application. m. Documentation of U.S. National in accordance with Section A, Ch. 1, Para. F., “Citizenship and Residency Requirements”. Lenders must receive verification of the status of each U.S. National. Lender must document their findings of the review proving a U.S. National’s status (birth certificate and/or passport) in the loan file, and enter the U.S. National’s Social Security Number on the Application in the SBA Loan System. n. Management agreements, if applicable, and if the management agreement is not part of the franchise disclosure documents for a brand listed on the Franchise Directory. See Section A, Ch. 1, Para. E.3.e. on management agreements. 2. Where to Submit Applications for Guaranty a. Non-delegated applications – Lenders submitting applications using non-delegated procedures must submit applications for guaranty and all attachments via the SBA Loan System to the LGPC. Documents greater than 250MB must be separated into multiple documents. The system does not support uploads greater than 250MB. b. PLP applications – Lenders submitting applications using their PLP authority must submit guaranty applications via the SBA Loan System, retaining all required documentation in the Lender’s loan file. c. Reconsideration of Declined non-delegated 7(a) Loan Applications (13 CFR § 120.193): i. If the Lender believes the reason(s) for decline have been overcome, a request for reconsideration may be submitted along with a detailed written explanation of how the Applicant has overcome the reason(s) for decline. Lender must submit a request for reconsideration to the LGPC within 6 months of the date of decline. Any request submitted more than 120 days after the date of decline must include current financial statements. ii. If a request for reconsideration is declined by the LGPC, a second reconsideration may be requested from the D/FA or designee, whose decision is final. The request to the D/FA or designee must be submitted to the LGPC and must include a copy of the Center’s decline letter and include additional information that specifically addresses the reason(s) identified for decline and how the Applicant has overcome those reason(s). The LGPC will forward the request to the D/FA or designee for a final decision. 3. See Chapter 6, SBA Terms and Conditions through Disbursement for all 7(a) Loans, in Section B, for SBA requirements for the SBA Terms and Conditions, post-approval and pre-disbursement requests for changes, transfer of guaranty between participating Lenders, and loan closing and disbursement.

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