Earlier this year, the Small Business Administration (SBA) introduced three new standard operating procedures (SOPs), significantly impacting small business lenders. Effective Aug. 1, 2023, lenders were required to start complying with the new guidelines (SOP 50 10 7, SOP 50 56 1 and SOP 50 57 3).

Amongst the SOPs, a key item to note (referenced in SOP 50 57 3) relates to the reporting of SBA 7(a) loan extensions to an appropriate credit reporting agency, including Dun & Bradstreet, Experian or Equifax. Be sure to provide information necessary to establish the identity of the borrower, such as:

• Name, address and taxpayer identification number
• The amount, status and history of the debt
• The agency or program under which the debt arose

Note, this reporting only applies to loan borrowers, not guarantors. Furthermore, once you have done the initial reporting, lenders must report SBA loan servicing and liquidation activity throughout the life of the loan. While this reporting must be performed on a quarterly basis, more frequent updates may be provided as necessary to maintain the integrity and accuracy of the information being reported.

Here to Help

While many lenders anticipate more technical updates to come, it’s critical to remain compliant with the existing SOPs to avoid any violations. Consider partnering with a qualified SBA loan reviewer, such as those at Doeren Mayhew, to have a detailed independent loan review performed to confirm compliance. Doeren Mayhew also offers a review software, GOLoan Review that helps to verify your 7(a) loans are compliant with the new SOPs and documents the entire review process with a workpaper. Learn more by scheduling a demo today.