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Principal compromise is a viable option when an SBA 7(a) loan runs into trouble, and the only other option is SBA loan liquidation. It’s helpful for the business owner, because it allows them to keep on keeping on. But there are some significant risks and potential “gotchas” for the Lender, especially when navigating SBA SOP 50 57 guidance. Let’s take a look.

Managing SBA Chapter 11 Bankruptcies The hard economic reality right now is that small business bankruptcies are on the rise. So let’s look at what you can do to prepare your SBA Lending team to protect the guaranty, control costs, and maintain SBA compliance while meeting evolving SBA lender requirements. As Benjamin Franklin said so long ago, an ounce of prevention is worth a pound of cure.

The SBA Form 1502 report may be everyone’s least-favorite aspect of SBA 7(a) lending. It’s a source of anxiety for both the SBA 1502 expert on your team as well as your senior management. Your 1502 worker-bees know it’s the mechanics of the SBA Form 1502 report where the problems start – missing reconciliations, inconsistent timelines, unsupported recoveries, and so on. Researching these issues is time-consuming, frustrating, and anxiety-producing. We’ve heard people calling

Let’s start here: SBA lending is not “small commercial lending with extra paperwork.” Instead, it’s strategic risk management guided by the SBA SOP. Why? To start with, the government guaranty fundamentally changes risk exposure. And then there’s the community aspect: SBA loans allow banks to safely serve small-business Borrowers that might not qualify for a standard commercial loan. This helps stabilize not only the local business community, but also the bank’s overall credi

In SBA 7(a) Lending, you obviously have to focus on the factors that make a loan eligible. Business acquisition, partner buyout, equipment purchase, working capital – these criteria matter for compliance and eligibility. But those criteria, while important, aren’t the only factors that determine whether a deal succeeds. As SBA Lender service providers and consultants, we recognize that all loans are unique unto themselves.

There were a lot of U.S. bank mergers & acquisitions (M&As) in 2025 – over 170, according to American Banker, which is a significant increase from prior years – and there are still more pending as we go into the new year.

If you’ve followed us for any length of time, or if you’ve had the pleasure (!) of being a client, you know we love SBA Lending. In fact, you may know that we happily and proudly call ourselves SBA Geeks. We truly enjoy helping our bank clients meet the needs of the small businesses in their community – the businesses that are the backbone of our country’s economy.

Effective March 1st, 2026, SBA will no longer allow the use of FICO®’s Small Business Scoring Service to screen 7(a) small loans (loans up to $350,000). Instead – as has been an observable trend for over a year now – SBA is re-emphasizing that Lenders must return to traditional commercial credit analysis in alignment with how their non-SBA commercial loans are evaluated and underwritten, as outlined in the SBA SOP 50 10 8.

Lenders have always been responsible for verifying owners’ citizenship and residency according to SBA SOP 50 10 8. But beginning January 1st of 2026, and then again as of March 1st, standards have changed and are being enforced with greater precision. In short, ownership eligibility now more than ever is a key consideration for SBA compliance.

Equity injection is a common stumbling block for many SBA Lenders, causing problems with SBA loan reviews and SBA guaranty purchase requests. Learn more