SBA SOP 50 10 8, A.Ch4.D.6 — Lender Service Provider Agreements
Verbatim text of SBA SOP 50 10 8 section A.Ch4.D.6 (Lender Service Provider Agreements), effective 2025-06-01. 8 provision(s) quoted from the SOP PDF. SBA's own document page serves superseded editions, and the SOP is further amended by policy notices — read this with the notices that touch it.
Verbatim regulatory text
Verbatim provisions from SBA SOP 50 10 8, A.Ch4.D.6 — Lender Service Provider Agreements — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
SOP 50 10 8 A.Ch4.D.6
6. Lender Service Provider Agreements 13 CFR § 103.1(d) A 7(a) Lender may contract with a third party LSP to assist the 7(a) Lender with one or more lender functions. The LSP must perform these services under a written LSP Agreement between the 7(a) Lender and the LSP that must be submitted to SBA for review. A 7(a) Lender must have a continuing ability to evaluate, process, close, service, liquidate and litigate small business loans (13 CFR § 120.410). The 7(a) Lender itself, not the LSP, bears full responsibility for all aspects of its SBA Loan operation and must be able to demonstrate that it exercises day-to-day responsibility for evaluating, processing, closing, disbursing, servicing, liquidating, and litigating its SBA portfolio. An LSP may only receive compensation from the 7(a) Lender for services provided under an SBA-reviewed LSP Agreement. Such charges must not be passed on to the Applicant or paid out of the SBA-guaranteed loan proceeds. Services performed by the LSP for the 7(a) Lender in accordance with the LSP Agreement are not reported on SBA Form 159. (13 CFR § 103.5(c)). The following are examples of when SBA considers an Agent to meet the definition of an LSP: i. An individual or entity engaged by a 7(a) Lender to provide services for the purposes of obtaining Federal financial assistance that include interaction with the Applicant either in-person or through the use of technology, to request or obtain financial information that will be provided to the 7(a) Lender or SBA. This includes Agents who: a) Perform any pre-qualification review based on SBA’s Loan Program Requirements or the 7(a) Lender’s internal policies prior to submitting the Applicant’s information to the 7(a) Lender; or b) Provide to the 7(a) Lender an underwritten application, whether through the use of technology or otherwise.
SOP 50 10 8 A.Ch4.D.6.ii
ii. Entities providing technology services to a 7(a) Lender that include underwriting. SBA will investigate any complaint by an Applicant, 7(a) Lender or any other participant in an SBA program concerning the activity, services completed, or fees charged by any LSP. An LSP Agreement may not grant the LSP power of attorney to act on behalf of the 7(a) Lender. If the 7(a) Lender engages an LSP to handle its SBA Borrower payments: i. The funds must be held in an account in the 7(a) Lender’s name, not the name of the LSP; however, consistent with the LSP Agreement, the LSP may be permitted limited access to the account in order to process Borrower payments; ii. For those loans where the guaranteed portion has been sold on the Secondary Market, the account also must be properly titled in accordance with SBA Form 1086, “Secondary Participation Guaranty Agreement.” iii. The LSP may not commingle any funds from multiple lenders; there must be separate accounts for each of its lender clients. iv. The LSP may not net its fee out of any Borrower payments or other funds collected on the 7(a) Lender’s behalf. All participating 7(a) Lenders must submit each LSP agreement to the LGPC for review at [email protected]. If there are any changes to an LSP agreement after review by SBA, the 7(a) Lender must submit the revised agreement to SBA for review. SBA reserves the right to audit compliance with any SBA-reviewed LSP agreement. Upon the termination or cancellation of any LSP Agreement, a copy of the notification of termination must be sent to [email protected]. The notification must include the date of termination and the 7(a) Lender’s SBA Location ID. SBA does not provide a form of LSP Agreement but expects 7(a) Lenders and LSPs to negotiate the terms of the contract to meet the needs of the 7(a) Lender. Each agreement must include the following: i. Identification of both parties including full legal name, trade name or dba, address, and contact person’s name, address, phone number, email address, and the 7(a) Lender’s Location ID Number. ii. Services: The contract must specifically identify the services that will be performed by the LSP.
SOP 50 10 8 A.Ch4.D.6.ii.iii
iii. 7(a) Lender’s responsibility: There must be a statement that the 7(a) Lender bears full responsibility for all aspects of its 7(a) loan operation, including, but not limited to, approvals, closings, disbursements, servicing actions and due diligence. The LSP only provides assistance to the 7(a) Lender. If an LSP is authorized to access SBA’s Capital Access Financial System (CAFS), including E-Tran, on behalf of a 7(a) Lender, the 7(a) Lender acknowledges it is responsible for all entries and certifications made into CAFS by the LSP. iv. If the 7(a) Lender plans to engage an LSP to handle its SBA Borrower payments, the LSP Agreement must describe the specific parameters governing the LSP’s access to the funds;
SOP 50 10 8 A.Ch4.D.6.v
v. Compensation: The compensation must be specifically explained as to what will be charged for each type of service and must state that the fees are for services actually performed. a) Fees related to assisting the 7(a) Lender with packaging, processing, or underwriting cannot be contingent on whether the loan is approved or closed. b) The contract must state that all compensation paid to the LSP will be paid by the 7(a) Lender and that the 7(a) Lender and the LSP are prohibited from charging the Applicant for the same services. c) The 7(a) Lender and the LSP cannot share in any Secondary Market premium. d) The billing for loan packaging or for other loan processing services must identify the Applicant’s name.
SOP 50 10 8 A.Ch4.D.6.v.vi
vi. Term: The full term of the contract including renewal options must be stated in order for SBA to determine if it is reasonable. In addition, the contract must clearly identify terms and conditions satisfactory to SBA that permit either party to terminate the contract prior to its expiration date on a reasonable basis (usually 60 days or sooner for cause). vii. The contract also must include the following statements or disclosures: a) The LSP will not assume a portion of the risk of the un-guaranteed portion of any loan. b) Disclosure by the LSP of any affiliations with other financial institutions, commercial lenders, CDCs, CUSOs, other LSPs, or loan brokers. c) Disclosures of any prior or existing relationship other than the contractual one created by the agreement, or a statement that no such relationship exists. d) The agreement is subject to all applicable laws, regulations, and policies including all SBA Loan Program Requirements. e) In the event this Lender Service Provider Agreement conflicts with any other contract or agreement between the parties, now or in the future, this Lender Service Provider Agreement will control with respect to the 7(a) Lender’s SBA Loan portfolio. viii. 7(a) Lenders are responsible for the actions of their LSPs and must ensure that they comply with all applicable laws and regulations governing confidentiality. 7(a) Lenders should consult with their Counsel on appropriate language to be included in their LSP Agreements. ix. The contract must not evidence any actual or apparent conflict of interest or self-dealing on the part of any of the 7(a) Lender’s officers, management, or staff. 7. Fees an Agent May Charge an Applicant for Packaging and Other Services An Agent may charge an Applicant for:
SOP 50 10 8 A.Ch4.D.7.i
i. Packaging services to assist the Applicant with completing one or more applications, preparing a business plan, cash flow projections, and other documents related to the application; and
SOP 50 10 8 A.Ch4.D.7.i.ii
ii. Other services that include consulting as to the amount and type of financing needed and broker or referral fees. (As stated above, the 7(a) Lender and its Associates are prohibited from charging an Applicant for these services.) Regardless of who pays the Agent, the fees must be reasonable and customary for the services actually performed and, for those Lenders with non-SBA guaranteed portfolios, must be consistent with those fees charged on the 7(a) Lender’s similarly-sized, non-SBA guaranteed commercial loans. If the 7(a) Lender does not charge a particular fee on its similarly-sized, non-SBA guaranteed commercial loans, it may not charge the fee on its SBA guaranteed loans. An Agent may charge an Applicant fees for packaging and other services based on an hourly rate or on a percentage of the loan amount. In either case, all fees over $2,500 must be supported by documenting the service performed. i. For fees charged to an Applicant on an hourly rate, there is no maximum, but the fees must be reasonable and customary for the services actually performed. The hourly rate and time spent on each service must be documented. ii. For fees charged to an Applicant based on a percentage of the loan amount, the fee may not exceed (if multiple services are provided to the Applicant, the combined fee for all services cannot exceed the stated maximums below): a) 3 percent on loans of $50,000 or less; b) 2 percent for loans between $50,000 and the first $1,000,000 and 0.25 percent on the portion over $1,000,000; however, c) The maximum fee that may be charged in the aggregate to an Applicant on a percentage basis is $30,000. iii. SBA does not allow an Agent to charge an Applicant: a) A standard or flat fee charged to all Applicants; b) Contingency fees (fees paid only if the loan is approved or closed); or c) For services that are not reasonably necessary in connection with an application. SBA may review these fees at any time. Agents must refund any fee considered unreasonable or impermissible by SBA. Review of Agent Fees.
SOP 50 10 8 A.Ch4.D.7.i
i. 7(a) Lenders must review all services and related fees charged to either the 7(a) Lender or the Applicant by any Agent to determine if the fees are necessary and reasonable when: a) There is an indication from a third party that an Agent’s fees might be excessive; or b) An Applicant complains about the fees charged by an Agent. ii. In cases where fees appear to be unreasonable or impermissible, 7(a) Lenders should contact the D/OCRM to report the fees. iii. If an SBA investigation determines an Agent fee is excessive, the Agent must reduce the fee to an amount SBA deems reasonable, refund any sum in excess of that amount to the Applicant, and refrain from charging or collecting from the Applicant any funds in excess of the amount SBA deems reasonable.
Operationalizing SBA SOP 50 10 8, A.Ch4.D.6 — Lender Service Provider Agreements
This is verbatim, source-snapshotted regulator text from the Claude for Compliance open corpus. To turn a rule like this into compliance work product: gap-analyze your policies and procedures (P&Ps) against these requirements to surface stale, conflicting, or missing provisions; operationalize any change with a ready-to-run update kit; and produce audit-ready evidence — every step grounded only in the regulator’s own words, never invented.
To work from the whole rulebook rather than this one page: download the corpus — every register on this site, verbatim, each with its source snapshot and effective date — then follow the methodology. It asks your assistant to answer only from the downloaded text, cite the register id and effective date it used, and tell you when the corpus does not cover something instead of filling the gap from memory. Running it locally also means no one sees which regulations you are looking at.
Source of record: https://claudeforcompliance.com/regs/sba-sop-a-ch4-d-6/
· register sba-sop-a-ch4-d-6 · Claude for Compliance. Free to read and download;
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