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SBA Changes Improve Access to 504 and 7(a) Loan Programs

May 13, 2014

SBA Recently Issued the "Final Rule"

While we all know that rulemaking is never

SBA-504-Program-Changes-2014 CMDCPersonal Resource Test Eliminated

SBA will no longer require that the personal resources of owners be used to reduce the SBA funded portion of the total financing package. Lenders should continue to follow prudent lending practices and require that assets either be injected or pledged as collateral for a particular loan if deemed prudent.

Required Participation by 3rd-Party Lender & Preferences

If a Third Party Lender requires a lien on any type of collateral or security that the Third Party Lender obtains, in addition to the Project Property, the Third Party Lender, in the event of liquidation, must first apply the proceeds from the sale of additional collateral to the balance on the Third Party Lender