SBA rules as of August 1st, 2008

Everyone has heard that the SBA has implemented new rules as of August 1st, some of them make financing more difficult, some of them have no impact...depending upon the bank that you speak with.

To summarize the biggest changes:

1. On construction transactions, the bank must obtain certification from the appraiser that the construction was completed according to plans and specs. Which means to the customer, additional costs to send the appraiser back out to the property.
2. For business acquisitions, a 3rd party valuation is required for loans >$350,000. And the 3rd party appraiser must be "qualified" and we must order the valuation.
3. In business acquisitions, we must document why the seller is not willing to finance blue sky.
4. Gas stations will be virtually impossible to finance.
5. Phase II's are mandatory for all on-site dry cleaners in operation for more than 5 years.
6. There is a lot of talk about down payments can no longer come from home equity. It is a grey area and we are working out the details and obtaining further clarification...more to come.
7. On all 7(a) transactions, the SBA now excludes Accounts Receivable and Inventory from the "fully secured" calculation.

If anyone has ANY questions, please do not hesitate to contact me.

As the rules are more clearly defined, I will be passing along that information.

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