SBA Express Loans

[Pages:25]SBA Express Loans

SOP 50 10 6

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Eligibility that applies to ALL 7(a) loans 1. Operating Business 2. Organized for Profit

3. Located in the United States (including territories and possessions)

4. "Small" under SBA Size Requirements 5. Demonstrate the Need for Desired Credit

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Ineligible Businesses

Some of these may be eligible under limited circumstances, please see SOP 50 10 6, section starting on page 141 for more details.

? Non-profit businesses

? Businesses engaged in lending

? Passive businesses

? Life insurance companies

? Businesses located in a foreign country or owned in whole or in part by undocumented aliens

? Businesses selling through a pyramid plan

? Businesses engaged in legal gambling activities

? Businesses engaged in any illegal activity

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Ineligible Businesses

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? Businesses that restrict patronage or have discriminatory hiring practices ? Government-owned entities (excluding Native American Tribes) ? Loan proceeds for religious activity ? Businesses engaged in SBA loan packaging ? Equity interest by SBA lender or associates in applicant concern ? Businesses providing prurient sexual material ? Prior loss to government ? Delinquent federal debt ? Business primarily engaged in political or lobbying activities

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Ineligible Businesses

Page three of three

? Speculation ? Small business lending company (SBLC) ? Coastal Barrier Islands

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Other factors that impact eligibility

? Character Determinations

This is determined by the SBA form 1919 that is completed by the borrower at time of application

Discussion starts on page 152 of the SOP 50 10 6

? Businesses owned by non-US citizens

This is also determined by the SBA form 1919 that is completed by the borrower at time of application.

Discussion starts on page 157 of the SOP 50 10 6

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Uses of Proceeds (page 161 of SOP 50 10 6)

? Acquire land ? Improve a site ? Purchase one or more existing

buildings ? Convert, expand or renovate one or

more existing buildings ? Construct one or more new buildings ? Finance a lender's OREO ? (the six uses outlined above are

subject to the Occupancy and Leasing Requirements described on page 164 of the SOP 50 10 6)

? Acquire (by purchase or lease) and install fixed assets

? Refinance certain outstanding business debts

? Inventory ? Supplies ? Raw materials (including WIP) ? Working capital ? Revolving lines of credit ? Farm enterprises ? Change of ownership

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