Effective Date: June 1, 2025
The SBA’s new SOP 50 10 8 introduces several important updates that aim to bring more consistency, transparency, and structure to SBA lending. As one of the most active SBA lenders in the country, United Midwest Savings Bank is ready—and already underwriting deals based on these changes.
We’re here to help you take advantage of what’s ahead and structure successful, SBA-compliant transactions with confidence. Please keep in mind that clarification and details about some of these SOP items are still evolving. We will provide updates as we learn more and encourage you to reach out to your United Midwest lender with any questions or concerns you may have.
What’s New and What It Means for You
- 10% Equity Injection Requirement
A minimum of 10% of total project costs is required for startups and changes of ownership. - Seller Debt on Standby
Seller notes may count toward half of the required equity but must remain on full standby for the term of the loan. Additionally, in cases where there are multiple seller notes, only the one being used for equity injection is REQUIRED to be on full standby for the life of the loan. - Seller Guaranties on Partial Buyouts
When a seller retains ownership post-close, they must now provide a personal guaranty—aligning incentives and supporting a smoother transition. - Expanded Equity Options
Buyers can now meet equity requirements with verified grants, prepaid expenses, third-party appraised assets, or personal loans (if paid from outside the business). - No Injection Needed for Certain Expansions
If you're acquiring a business in the same NAICS code and geography with continued ownership, the 10% equity requirement may be waived entirely. - Clearer Partner Buyout Pathways
SBA now offers clearer guidance for partner transitions, making internal succession plans easier to finance. - Citizenship Requirements
Businesses must be 100% owned by U.S. citizens, U.S. nationals, or Lawful Permanent Residents (LPRs) to qualify for SBA 7(a) Loans. - Franchise Directory Reinstated
SBA’s new Franchise Directory brings clarity and consistency to franchise financing. Franchisors must apply by July 31, 2025. - Standardized Documentation Requirements
Reinstated requirements (i.e., tax transcripts, insurance) help lenders protect borrowers and ensure clean loan packages. - Credit Elsewhere Test Returns
Ensures SBA resources are directed to businesses that truly need them—supporting underserved borrowers.
Why This Is a Win for Borrowers
SOP changes are designed to streamline the SBA loan process, reduce gray areas, and create a more predictable experience for business buyers, sellers, and advisors. And with United Midwest Savings Bank already underwriting these guidelines, you’re a step ahead!
How United Midwest Savings Bank is Leading the Way
- Proactively advising borrowers and referral partners on new deal structures
- Adjusting internal processes for speed and clarity
- Staying ahead of SBA guidance as it evolves
Questions? Let’s Talk!
If you’re planning an acquisition, expansion, or partner buyout, we’re here to help you navigate the changes—and close with confidence.
Source: https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs
United Midwest Savings Bank Trusted. Responsive. Among the nation’s top SBA lenders.
