Proposed SBA 7(a) Program SOP Changes

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Posted on February 18, 2009 by Peter Siegel, MBA

Proposed SBA 7(a) Program SOP Changes

Proposed SBA March 1, 2009 7(a) Program SOP

Language added in Subpart B section 7(b) of this newest revision of the SOP:

Goodwill:

If the purchase price of the business includes goodwill (or "blue sky"), the lender should explore seller-financing with a subordinate lien to the SBA-guaranteed loan.

The lender may finance a limited amount of goodwill. In no event may the amount of goodwill financed by an SBA guaranteed loan exceed 50% of the loan amount up to a maximum of $250,000.

If any of the loan proceeds will be used to finance goodwill, the amount must be specifically identified in the Use of Proceeds section of the Authorization.

The new language effectively caps the amount of goodwill financing to $250,000. What can you do?

Send a letter to your local Representative and both of our senators asking to not allow this change to happen!