SBA SOP 50 10 8, C.Ch2.A — SBA E-TRAN TERMS AND CONDITIONS
Verbatim text of SBA SOP 50 10 8 section C.Ch2.A (SBA E-TRAN TERMS AND CONDITIONS), effective 2025-06-01. 5 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 SBA's own document page serves superseded editions, and the SOP is further amended by policy notices — read this with the notices that touch it.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, C.Ch2.A — SBA E-TRAN TERMS AND CONDITIONS — 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 C.Ch2.A
A. SBA E-TRAN TERMS AND CONDITIONS The E-Tran Terms and Conditions is SBA’s agreement between the SBA and the CDC providing the terms and conditions under which SBA will issue a debenture. 1. Loan Conditions (13 CFR § 120.160): SBA establishes the wording for the standard 504 E-Tran Terms and Conditions. The SBA-authorized E-Tran Terms and Conditions for 504 loans must use the pre-approved conditions that are found in the Boilerplate. The party responsible for drafting the SBA E-Tran Terms and Conditions is determined by the program the loan is processed under: i. Regular and ALP: The CDC drafts the SBA E-Tran Terms and Conditions and the SBA finalizes and executes and sends to the CDC for execution
SOP 50 10 8 C.Ch2.A.i.ii
ii. PCLP: CDC drafts and executes on SBA’s behalf SBA counsel must review and approve any E-Tran Terms and Conditions with the following exception. When processing a loan under PCLP lending authority, PCLP CDCs may develop E-Tran Terms and Conditions and use them without prior SBA approval, provided they are only used one time. Whenever a PCLP CDC develops and uses a non-standard condition, an explanation for its development must be in the loan file. 2. Disbursement Period, Interest Rates and Loan Maturity: Disbursement Period: The loan must be disbursed within 48 months from the date of approval. SBA will track the approved time frame for loans and automatically cancel undisbursed dollars. For Debt Refinance without Expansion, the loan must be disbursed within 9 months from the date of approval. The Denver Finance Center (DFC) will make a reasonable effort to mail an initial message to the CDC approximately 3 months prior to taking action on undisbursed funds. The message will inform the CDC of the undisbursed dollar amount and will provide a date on which the dollars will be automatically cancelled. After the 3-month message has expired, DFC will make a reasonable effort to mail a second message on the day the automatic cancellation is processed. A CDC may request an exception to policy to extend the disbursement period. SBA, through the OFPO/SLPC and with concurrence by SBA’s CFO to confirm funding authority, may approve the exception to policy and grant an extension. When appropriate, SLPC will also refer extension requests to OFA for concurrence with OGC and the CFO. CDCs must provide SLPC the reason for the need for an extension and document how the project funding sources and uses of proceeds have been adjusted for any increases in project costs. For Debt Refinance without Expansion, SBA may grant an extension not to exceed 15 months. Interest Rate: The interest rate for 10, 20, and 25 year 504 debentures is based on market conditions for long-term government debt at the time of sale. 13 CFR § 120.932 Maturity is 10, 20, or 25 years based upon the remaining useful life of the property being financed, in accordance with Ch. 1, Para. D.2, Loan Maturities. 3. Interim and Third Party Lender Requirements: CDC must insert the names of the Interim and Third Party Lenders and the amounts of the loans into the E-Tran Terms and Conditions. 4. Insurance Requirements: Lender must ensure all appropriate insurance requirements are included in the SBA E-Tran Terms and Conditions. 5. IRS Tax Transcript/Verification of Financial Information: The IRS Tax Transcript/Verification of Financial Information process must be completed in accordance with Section A, Ch. 5, Para. B, IRS Tax Transcript/Verification of Financial Information. 6. Standby Agreements: SBA Form 155,“Standby Agreement.” CDC may use SBA Form 155 or its own equivalent standby agreement form. A copy of the note must be attached to the standby agreement. Standby Creditor must subordinate any lien rights in collateral securing the Loan to CDC’s rights in the collateral and take no action against Applicant or any collateral securing the Standby Debt without CDC’s consent. 7. Assignment of Lease and Landlord’s Waiver: If applicable, the E-Tran Terms and Conditions must include conditions for assignment of lease and landlord’s waiver. 8. Construction Loan Provisions: In the construction of a new building or an addition to an existing building, the CDC must obtain:
SOP 50 10 8 C.Ch2.A.i.i
i. Evidence of compliance with the “"National Earthquake Hazards Reduction Program Recommended Provisions for the Development of Seismic Regulations for New Building”" (NEHRP), or a building code that has substantially equivalent provisions. (13 CFR § 120.174) a) The NEHRP provisions may be found in the American Society of Civil Engineers (ASCE) Standard 7 and the International Building Code. b) Examples of evidence include a certificate issued by a licensed building architect, construction engineer or similar professional, or a letter from a state or local government agency stating that an occupancy permit is required and that the local building codes upon which the permit is based include the Seismic standards. ii. The E-Tran Terms and Conditions must address the NEHRP provision when any of the use of proceeds options selected includes construction financing, including leasehold improvements. If the leasehold improvements made with loan proceeds will become permanently affixed to any structure on the leased premises, then they must comply with the NEHRP. If the leasehold improvements are only temporary, they do not need to comply with the NEHRP. Accordingly, if the Applicant can demonstrate that the leasehold improvements will be temporary, CDC may request modification of the SBA E-Tran Terms and Conditions to remove the NEHRP provision in accordance with Paragraph B., Modifying the SBA E-Tran Terms and Conditions, of this Chapter. The CDC must certify that the Project was completed in accordance with the final plans and specifications unless a minor portion of the project has been escrowed for a valid reason. (13 CFR § 120.891) If the interim financing comes from a CDC, the following additional conditions must be required in the E-Tran Terms and Conditions: i. Mortgages must be recorded prior to beginning construction.
SOP 50 10 8 C.Ch2.A.i.i.ii
ii. Inspections must be made by a qualified engineer, appraiser, or other party satisfactory to SBA prior to all progress disbursements. iii. The Applicant must furnish a firm construction contract to the CDC from an acceptable contractor at a specified price, including a provision that no material changes are to be made without the prior written consent of the CDC; iv. The contractor must furnish builder’s risk and workers’ compensation insurance; v. One complete set of plans and specifications of the proposed construction must be submitted to the CDC;
SOP 50 10 8 C.Ch2.A.i.v.vi
vi. Where the CDC or the Applicant is to inject funds into the construction project, these funds must be used prior to the disbursement of the interim financing; vii. The CDC must make and document periodic inspections of construction; and viii. When loan funds will be used to improve buildings on leased land, assignment of the lease must be obtained. 9. Special Provisions for Personal Property, Equipment and Fixtures as Collateral. If the collateral for the loan includes equipment and/or fixtures: The CDC must obtain a list of all equipment and fixtures that are collateral for the loan. For items with a unit value of $5,000 or more, the list must include a description of the equipment/fixture and serial number, if applicable. The list should be included in the collateral description (Item 4. COLLATERAL) on the UCC-1 Financing Statement. 10. Certifications of the CDC: The certifications required of the CDC are listed on SBA Form 2101, “CDC Certification.” 11. Certifications of the Borrower: The certifications required of the Borrower are listed on SBA Form 2289, “Borrower and Operating Company Certification.” 12. Certifications of the Interim Lender: The certifications required of the Interim Lender are listed on SBA Form 2288, “Interim Lender Certification.”
Operationalizing SBA SOP 50 10 8, C.Ch2.A — SBA E-TRAN TERMS AND CONDITIONS
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