Keeping up-to-date with SBA loan guideline changes.

Streamlining lending criteria

SBA currently considers nine different factors in its lending criteria to determine an applicant’s creditworthiness and the risk associated with repaying the loan. The new guidelines are streamlined to three factors, as follows:

a) Credit score and history of the applicant, the company and any guarantors.

b) Earnings and cashflow; and

c) Equity or collateral of the applicant, where applicable.

While the number of factors has been streamlined, it doesn’t prevent lenders or the SBA from considering other factors, when appropriate.

Another noteworthy change is the removal of the requirement to consider “character and reputation.” The industry has long used the terms “character” and “credit history” interchangeably. By now only using the term “credit history,” the meaning is clearer in context of a loan underwriting process. 

Revising the reconsideration process

The Director of the Office of Financial Assistance (OFA) makes all reconsideration decisions. To expedite the process of reconsideration for a denial of an application or loan modification, the SBA has granted the OFA Director the ability to delegate decision making to designees.