New SOPs Effective August 1: What You Need to Know to Remain Compliant
Over the past couple of months, the Small Business Administration (SBA) has introduced three new standard operating procedures (SOPs) impacting small business lenders. With all three taking effect Aug. 1, 2023, it’s important for you to remain diligent when processing loans, conducting reporting and performing loan reviews to ensure compliance with all SBA guidelines. Below, Doeren Mayhew has outlined the newest SOPs to be on the lookout for:
This SOP was constructed to define the different criteria for lender participation, outline small business lending company requirements and provide explanations of lender financing and operations. In addition, the guidance describes the application process for becoming a Certified Development Company (CDC) and the oversight by the SBA.
Introduced as the first revision to the 7(a) servicing and liquidation rules since 2015, the detailed SOP applies to the administration of 7(a) loans that have been fully disbursed and are in “regular servicing” or “liquidation” status.
Replacing SOP 50 10 6, this guidance is divided into three sections which provide significant formatting and procedural updates for all 7(a) and 504 loans. Stay on the lookout for this SOP’s technical update to be released soon.
With the upcoming effective date, it’s critical now more than ever to ensure your institution is complying with the updated guidelines. Performing a detailed SBA loan review, or having one done by a third-party provider, can allow you to stay proactive and ensure compliance with all SOPs. If you’re performing your review internally, consider leveraging a review software, like Doeren Mayhew’s GOLoan. Our software checks for compliance, provides helpful tips and detailed reporting, and is up-to-date with SOP 50 57 3 and SOP 50 10 7. Schedule a demo today to learn more about how it can serve as an effective compliance tool for you.