SBA SOP 50 10 8, B.Ch4.B.3 — Ineligible NAICS Codes
Verbatim text of SBA SOP 50 10 8 section B.Ch4.B.3 (Ineligible NAICS Codes), 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 SBA's own document page serves superseded editions, and the SOP is further amended by policy notices — read this with the notices that touch it.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, B.Ch4.B.3 — Ineligible NAICS Codes — 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 B.Ch4.B.3
3. Ineligible NAICS Codes For purposes of clarification, small businesses in the following NAICS Industry Subsector Codes cannot be financed using an EWCP loan, but may be financed using other SBA 7(a) financial assistance: NAICS Industry Subsector Code 721 (Accommodation) NAICS Industry Subsector Code 457 (Gasoline Stations). 4. Loan Terms and Conditions for EWCP a. Maximum Loan Amount i. The maximum loan amount is $5,000,000.
SOP 50 10 8 B.Ch4.B.4.a.ii
ii. Maximum Loans to Businesses with Affiliates 13 CFR § 120.151 Lenders must determine whether the Applicant has any affiliates and document the results in their credit analysis. If affiliation exists, SBA’s loan maximums apply to the Applicant, including all affiliates, as if all were a single business.
SOP 50 10 8 B.Ch4.B.4.b
b. Maximum Guaranty Amounts and Percentages Except for EWCP and International Trade loans, the maximum dollar amount outstanding of SBA’s guaranty to any one business (including affiliates) must not exceed $3,750,000. SBA considers an EPC and an OC to be “one business” for this purpose. However, both EWCP and International Trade loans permit a maximum dollar amount outstanding of SBA’s guaranty of $4,500,000. When calculating the maximum guaranty percentage available to a Borrower and its affiliates, the Lender must include the approved loan amount for a revolving line of credit. The SBA’s guaranty is also known as the “SBA share” or “guaranteed portion.” i. The maximum guaranty amount is $4,500,000. ii. For EWCP, the guaranty percentage is 90 percent. iii. Zero Percent Guaranty Cannot be Provided for Ineligible Purposes: A 7(a) loan cannot include proceeds for an ineligible purpose or have any portion of the loan made to an ineligible business and no part of an SBA 7(a) loan may be guaranteed at zero percent. iv. Combination of 7(a) and 504 loans. a) When an Applicant applies for any combination of 7(a) and 504 loans, the order in which the loans are approved determines the maximum loan and guaranty amount available. Because the 7(a) loan has a lower maximum guaranteed amount, the 7(a) loan should be processed and approved first. b) Lenders must advise the SBA processing centers that there is a companion 504 application to ensure the 7(a) loan is processed and approved prior to the 504 loan application being processed and approved. c. Loan Maturities i. The loan term must be the shortest appropriate term based on the use of proceeds and the Borrower’s ability to repay.
SOP 50 10 8 B.Ch4.B.4.c.ii
ii. General: The maximum maturity of an EWCP loan is 36 months. The maturity date is set in terms of the number of months from either the date of Note or the date of initial disbursement to the date when final payment is due. SBA’s guaranty remains in effect for disbursements made through the maturity date. With the exception of a disbursement made to fund a draw against a Standby Letter(s) of Credit that was issued under the EWCP before the maturity date, disbursements made after the maturity date are not covered under the guaranty. The maturity of the loan is: a) The date specified in E-Tran. Such date will not be longer than 36 months from the Note date. If the loan is not reissued, or extended, all outstanding amounts are due and payable on that day. b) Standby Letters of Credit. Unless SBA provides prior written consent, Standby Letters of Credit supported by an EWCP loan must expire before the loan maturity date. If the Lender receives SBA’s prior written consent and makes a disbursement after the maturity date because there has been a draw on a standby letter of credit which was issued under the EWCP prior to the maturity date, such disbursement will be covered by the guaranty. c) Loan maturity must not exceed the period of the guaranty. iii. Specific Types of EWCP loans: a) Single Transaction-Specific Loan: A non-revolving loan or revolving line of credit that supports a specifically identified, single export transaction. The LGPC (if processed non-delegated) or PLP-EWCP Lender (if processed via PLP-EWCP authority) may approve a term up to 36 months to correspond with the length of the transaction cycle. When the term exceeds 12 months, justification and recommendation for a longer maturity must be included in the Lender’s credit memorandum (if processed via PLP-EWCP) or in the SBA Export Finance Manager’s credit memorandum (if processed non-delegated). (Export Finance Managers are assigned to United States Export Assistance Centers (USEACs).) b) Transaction Based-Revolving Line of Credit: A revolving line of credit can support either multiple export transactions or a single, specifically identified export transaction on a continuous basis during the term of the loan. While the term of a revolving line of credit typically does not exceed 12 months, LGPC or PLP-EWCP Lender may allow an initial commitment up to 36 months with annual renewals. c) Asset Based Loans (ABLs): ABLs are revolving lines of credit supported by a monthly BBC which reports levels of assets, normally accounts receivable and inventory, supporting the loan amount. ABLs are typically committed for 12 months and re-issued annually. Because a re-issuance of a loan is a new loan, another guaranty fee is due each time the loan is re-issued. ABLs, however, can have up to a 36-month maturity with annual renewals. The Lender must supply to SBA updated financial statements on the Borrower annually.
SOP 50 10 8 B.Ch4.B.4.d
d. Interest Rates i. SBA does not prescribe the interest rates for the EWCP but will monitor these rates for reasonableness. 13 CFR § 120.344(c) a) A loan may have a fixed or variable interest rate. The Lender negotiates the interest rate with the Applicant. b) The spread above the base rate as identified in the Note may not be changed during the life of the loan without the written agreement of the Borrower. For further discussion of variable interest rates, see Paragraph ii., “Policy on Variable Interest Rates” below. c) Default interest rates are not permitted. d) For loans with a variable interest rate, the following terms must be defined: i) Base Rate and applicable spread: ii) Frequency of change; iii) Range of fluctuation; and iv) Ceiling and floor (if any). e) After approval and prior to final disbursement, Lender must either notify the LGPC of any changes to the Note terms related to the interest rate or make the change through E-Tran Servicing. After final disbursement, Lender must either notify the appropriate SBA CLSC of any changes to the Note terms related to the interest rate or make the change through E-Tran Servicing. ii. Policy on Variable Interest Rates a) Post-Approval Changes to the Interest Rate:
SOP 50 10 8 B.Ch4.B.4.d.i
i) Pre-Disbursement Changes: After loan approval and prior to first disbursement, the Lender may change the initial Note rate, including changing the base rate, the spread over the base rate, or changed from a fixed rate to a variable rate, or from a variable rate to a fixed rate, provided the new interest rate is reasonable. SBA will monitor these rates for reasonableness. 13 CFR § 120.344(c) The Lender must obtain the Borrower’s written consent to the change in the interest rate (separate and apart from executing the loan documents) and must notify the LGPC of the change or make the change through E-Tran Servicing. For example, an SBA-guaranteed loan was approved with a variable rate. Since the loan was approved, the prime rate changed. The Borrower has asked the Lender if the loan can be switched to a fixed rate. If the loan has not been disbursed and the fixed rate selected is reasonable, the Lender may make this change per the Borrower’s request. ii) Post-Disbursement Changes: After the loan is disbursed, on a variable rate loan, the Lender may change the base rate or the spread over the base rate, provided the new base rate or spread is reasonable. SBA will monitor these rates for reasonableness. 13 CFR § 120.344(c) The Lender must obtain the Borrower’s written agreement and must notify the appropriate SBA CLSC of the change or make the change through E-Tran Servicing. For further guidance see SOP 50 57. b) Interest Rate Requirements for an SBA Note: i) For fixed rate loans, the Lender must state the specific interest rate in the Note. ii) For variable rate loans, the Lender must include the following information in the Note: (a) Identification of the rate being used as the base rate; (b) The publication in which the designated base rate appears regularly (e.g., Wall Street Journal or the Federal Register if using the SBA Optional Peg Rate); (c) The permanent percentage spread to be added to the base rate; (d) The initial interest rate of the loan (from disbursement to first adjustment); (e) The date or timing of the first rate adjustment; and (f) The frequency of rate adjustment. c) Accrual Method: SBA does not require a specific accrual method for EWCP loans. iii. Fixed and Variable Rate Combinations: The Lender may use a fixed rate on either the guaranteed or unguaranteed portion and a variable rate on the other portion of the loan. SBA allows such combinations as long as neither rate exceeds the SBA maximum interest rate. A Lender may use this structure to make a loan that permits it to retain a variable interest rate on the unguaranteed portion and sell a fixed rate guaranteed portion on the Secondary Market. If the Lender uses a combination, the entire loan is considered to be a variable interest rate loan. The interest rate on both the guaranteed and unguaranteed portions must be based on the variable rate.
SOP 50 10 8 B.Ch4.B.4.e
e. Payment Options for EWCP Ongoing Guaranty Fee i. For EWCP loans approved after September 27, 2010, the Lender may choose one of the following options for payment of the EWCP Ongoing Fee only. Either option (monthly or annually) will result in payment of the same total amount of EWCP Ongoing Fee on each EWCP loan. Regardless of which payment option is chosen, the Lender must continue to submit, on a monthly basis, the Lender’s SBA Form 1502 Report on all 7(a) loans in the Lender’s portfolio, including all EWCP loans. a) Option 1 – Monthly Payment of EWCP Ongoing Fee: Option 1 allows Lenders to pay the EWCP Ongoing Fee monthly along with other 7(a) loan ongoing servicing fees to the Fiscal Transfer Agent with the required SBA Form 1502 Report. Because EWCP loans may be a small percentage of the Lender’s 7(a) portfolio, Option 1 allows Lenders to voluntarily pay the EWCP Ongoing Fee on each EWCP loan on a monthly basis along with the rest of their 7(a) portfolio. b) Option 2 – Annual Payment of EWCP Ongoing Fee: Lenders may pay the EWCP Ongoing Fee on each EWCP loan annually by selecting Option 2. Lenders selecting Option 2 will receive an annual invoice on each EWCP loan from SBA’s DFC. The EWCP loan balance reported by the Lender on the monthly SBA Form 1502 Reports for the EWCP loan will allow Denver Finance Center (DFC) to compute the EWCP Ongoing Fee amount to be billed annually. The vast majority of EWCP loans have a maturity of 12 months or less; however, EWCP loans may have a maturity of up to 36 months. For EWCP loans with a maturity of 12 months or less, Lenders will receive one EWCP Ongoing Fee invoice after maturity. For EWCP loans with a maturity in excess of 12 months and not more than 24 months, Lenders will receive an EWCP Ongoing Fee invoice 12 months after closing and again after maturity. For EWCP loans with a maturity greater than 24 months, Lenders will receive an EWCP Ongoing Fee invoice 12 months after closing, 24 months after closing and again after maturity. The DFC will mail the Lender an EWCP Ongoing Fee invoice on each EWCP loan within 60 days of each 12-month interval on the EWCP loan and payment will be due within 30 days of the date of the invoice. The invoice will be for the EWCP Ongoing Fee amount owing for the previous 12 months, or shorter period for loans maturing prior to the end of the 12-month period. Lenders will be given instructions on the invoice to make payment using the Pay.gov online payment process. Fiscal Transfer Agent will send monthly EWCP reports to DFC and SBA’s Office of International Trade (OIT). This report will track information on each EWCP loan by Lender, including but not limited to the following:
SOP 50 10 8 B.Ch4.B.4.e.i
i) Whether the Lender is submitting SBA Form 1502 Reports on EWCP loans as required; ii) When annual invoices are to be sent; and iii) The accrued amount to be billed for the EWCP Ongoing Fee for each EWCP loan. ii. The DFC will send a monthly report to OIT and SBA’s Office of Credit Risk Management reporting any Lenders that are delinquent on payments of invoiced EWCP Ongoing Fees. OIT will be responsible (through delegation to the Export Finance Manager) for monitoring Lenders in regard to submitting the required SBA Form 1502 Reports and the payment of the required EWCP Ongoing Fees. A Lender’s failure to pay any of the fees (and any interest and penalties that are subsequently charged by SBA due to a lender’s delinquent payment) may result in SBA’s decision to suspend or revoke a lender’s eligibility to participate in SBA’s 7(a) program or to limit a lender’s delegated authority.
Operationalizing SBA SOP 50 10 8, B.Ch4.B.3 — Ineligible NAICS Codes
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