Updated Applicant Certification Requirements

Applicant certification requirements under the recently-released SOP 50 10 8 are a mix of new, changed, and familiar.

Many of the Applicant certifications can be found in the current Form 1919 from February 2025. However, we’ve heard that an updated Form 1919 is on the way, though its release date – and its changes – haven’t yet been announced.

But what about required certifications that aren’t in the Form 1919, and how can you, as a Lender, ensure that you have them? Here’s an overview of what you need.

1. The Applicant’s business must be 100% owned, either directly or indirectly, by a U.S. Citizen, U.S. National, or Lawful Permanent Resident. The SOP requires Lenders to certify that ownership in ETran. Therefore, it’s not available on Form 1919 for the Applicant to certify. Best practice: request a separate affidavit or certification from the Applicant to confirm U.S. ownership.

   
   

2. The Applicant’s business may not employ undocumented immigrants. That should come as no surprise to anyone, of course, and certification can – and should – be part of the separate affidavit from the Applicant.

   
   

3. When an Eligible Passive Company is owned by a trust, SBA requires the Trustee(s) to certify that:

   1. They have authority to act;

   2. The Trust has authority to borrow funds, pledge assets, and lease property to the Operating Company;

   3. They have provided the Lender with a complete list of all trustors and donors, and will provide updates to that list when changes occur.

      
      

Lenders can collect this information in a Trust Certification document at closing.

If National Historical Property is pledged as collateral and no modifications are planned, the Borrower must provide certification that they’re not intending to alter or renovate the property. This can be done with SBA Form 2481.

The Borrower Certification document has been discontinued – but certifications must still be obtained. Best practice: create a closing document to address these. We do not recommend using the old – discontinued – Borrower Certification form. SBA hasn’t updated it for current 7(a) loan requirements.

The certifications required are:

1. The Borrower has received a copy of the ETran Terms & Conditions;

2. There have been no adverse changes to the Borrower’s or Operating Company’s financial condition, organization, operations, or fixed assets since the date the application was signed;

3. Appropriate environmental compliance and indemnification is available for any real estate pledged as collateral;

4. As far as is practical, only American-made equipment and products will be purchased with loan proceeds.

But wait – there’s more! There are several program-specific requirements for International Trade loans, Caplines, and Export Working Capital – just to name a few. And there are Lender-required certifications as well. We’ve given you a summary here, and as always, we recommend a thorough read of the SOP itself.

Staying compliant with certifications that protect your guaranty is daunting – and having dedicated staff isn’t easy for small SBA lending programs. That’s where we can help. As SBA geeks (yes, we proudly claim that title!), we work hard to stay on top of all requirements, so we can support your team with SBA compliance reviews – and, of course, with SBA training in the new SOPs. Give us a call at 877-576-0819, or drop us a line through our Contact form here. We’ll set a time to understand your programs and see how we can help.