OUR BLOG

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

Inadequate documentation of equity injection is one of the most common issues cited in SBA loan reviews and guaranty purchase requests, often resulting in SBA compliance concerns for lenders. This is despite the fact that in many cases the injection actually did happen correctly. Why the problems? It’s usually about the audit trail, not about whether the Borrower had the money. If you can provide consistent documentation, starting at origination, according to SBA’s injection

Your SBA lending program is only as strong as your team – and in today’s highly-regulated and definitely fast-changing environment, success depends on your team’s collective understanding of the entire SBA loan lifecycle. And that’s where SBA Lender training – including cross-functional training – become more essential than ever.

There are two primary ways Lenders run into trouble with loan originations. The first – Screen-Outs – applies only during General Processing (GP) submissions. The second – Compliance Code Holds – occurs within the automated SBA compliance engine, applying to both GP and Preferred Lender Program (PLP) submissions.

Let’s start with a sense of real urgency: all SBA Form 1502 errors reported to you by the FTA should be handled as your top priority, in the same month as you’re notified. Why? Because if the mismatches aren’t corrected in the reporting month, corrections are likely to become more complex, and the mismatches may continue to increase.

In today’s world of SBA intensive servicing, staying proactive is everything.
For lenders, knowing how to navigate a stressed or defaulted loan under the SBA new SOP isn’t just about compliance—it’s about protecting your portfolio and maximizing recovery.