SBA SOP 50 10 8.1, C.Ch2.B — Modifying the SBA Terms and Conditions

SOP 50 10 8.1 C.Ch2.B

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

B. Modifying the SBA Terms and Conditions 1. The CDC must request in writing SBA’s approval of modifications to the terms and conditions of the 504 loan at any time after approval but before funding: a. For an increase or decrease in the amount of an approved loan, the 327 action must clearly support the need for the change in the amount and address the effects on repayment ability, collateral and jobs created or retained. The 327 action must also provide the revised breakdown of the private sector lender, debenture, and Applicant’s injection, including a revised use of funds. b. Any adjustments to or changes in ownership of the Borrower, including percentage of ownership. CDCs may not unilaterally approve such adjustments or changes. 2. CDCs may use their unilateral authority to submit the following 327 actions using the 504 SBA Loan System: a. 504 Loan Cancellation (prior to closing); b. Borrower, EPC or OC mailing address. Note: CDCs must not exercise unilateral authority to change the address of the Project Property; c. Borrower, EPC or OC phone numbers and email addresses; and d. Principal or guarantor mailing address, phone number, and email address. 3. For loans approved under ALP Express delegated authority, ALP CDCs are authorized to perform the servicing actions listed below. The ALP CDC is responsible for making these loan modifications (also known as 327 Actions) in the SBA Loan System for ALP Express Loans: 4. An ALP CDC may correct an error in the street address of a property pledged as collateral for the ALP Express Loan. The ALP CDC may not change the location of the Project Property using ALP Express delegated authority. 5. An ALP CDC may change a Third Party Lender or Interim Lender for an ALP Express Loan provided that the lender is a financial institution that is regulated by the Federal Financial Institution Regulators (i.e., the Federal Deposit Insurance Corporation, the Federal Reserve Board, the Office of the Comptroller of the Currency, the National Credit Union Administration, and the Farm Credit Administration) or by a state financial institution regulator with supervisory and examination authority satisfactory to SBA. 6. An ALP CDC may add inadvertently omitted co-Borrowers (without changing the ownership) and guarantors for ALP Express Loans. 7. An ALP CDC may reduce the amount of standby debt for ALP Express loans before 504 loan closing. a. An ALP CDC may make de minimis increases to Use of Proceeds amounts on an ALP Express Loan provided the Total Project Costs do not increase. A de minimis increase is one in which the increase to all Use of Proceeds categories does not exceed 10% of the total project cost. ALP CDCs may reduce the project size under ALP Express delegated authority with no limitations. However, if these changes necessitate modification or deletion of collateral that was originally approved, the entire action must be submitted to SLPC for prior review and approval. 8. For loans approved under PCLP authority: a. Generally, PCLP CDCs may modify and extend the SBA Terms and Conditions up to 48 months from the date of approval using their unilateral authority. PCLP CDCs must upload the final modified executed terms and conditions to the SBA Loan System within 15 business days after debenture funding. b. PCLP CDCs must obtain prior written consent from the SLPC for any adjustments to or changes in ownership of the Borrower, including percentage of ownership, after loan approval. The SLPC will approve the proposed modification and enter it into the SBA Loan System after: i. Verification that the proposed changes to the ownership of the Borrower comply with limitations on the aggregate amount of SBA portions of all loans to a Borrower, including affiliates; and ii. Verification that there has been no prior loss to the Government caused by the new owner(s) or any business owned, operated, or controlled by the new owner(s). c. PCLP CDCs must obtain approval for increases or decreases in the loan amount directly in the SBA Loan System. Approval of the requested increase or decrease in the SBA Loan System will constitute SBA’s prior written consent. 9. Post-approval modifications (327 actions) must be submitted to the SLPC through the 504 SBA Loan System. Detailed guidance on the 504 SBA Loan System submission process is available on the SBA website in the 504 User Guide for submitting loan applications. 10. Neither the amount nor the maturity of a loan can be modified after the debenture closing has been completed.

Source: SBA SOP 50 10 8.1, C.Ch2.B — Modifying the SBA Terms and Conditions · source URL · snapshot 0fb0c4692cf52938