SBA SOP 50 10 8, C.Ch2.C.4 — Designated Attorney
Verbatim text of SBA SOP 50 10 8 section C.Ch2.C.4 (Designated Attorney), effective 2025-06-01. 24 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 SBA's own document page serves superseded editions, and the SOP is further amended by policy notices — read this with the notices that touch it.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.C.4 — Designated Attorney — 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.C.4
4. Designated Attorney 13 CFR § 120.802 A Designated Attorney is the CDC closing attorney that SBA has approved to close loans under an expedited closing process for a Priority CDC. To become a Designated Attorney, an attorney must submit evidence of: i. A degree from a recognized law school;
SOP 50 10 8 C.Ch2.C.4.ii
ii. Membership in the bar of the state in which the attorney’s 504 closing practice is or will be primarily located; iii. Professional malpractice insurance coverage: a) With limits of at least $1,000,000/$1,000,000; and b) A deductible not to exceed $20,000 for individuals and firms with 3 or fewer attorneys, $50,000 for law firms with more than 3 attorneys or $100,000 for large law firms with more than 25 attorneys. c) Applicants may request from the General Counsel, or designee, an increase in the deductible or a hardship exemption with respect to the policy limits. Policy limit reductions to $500,000/$1,000,000 will only be granted to sole practitioners and small firms of three or fewer attorneys, while deductible requirement waivers will only be granted to larger firms with a demonstrated, strong financial history. The General Counsel, or designee, will consider a number of factors when deciding whether to grant or renew a hardship waiver, including, but not limited to, the documentation provided in support of the waiver request, the number of 504 loan closings by the Designated Attorney in the prior 12 months, the total dollar amount of the 504 loans closed by the Designated Attorney in the prior 12 months, and the overall quality of the loan closing packages received from the Designated Attorney. If approved, a hardship waiver will have a duration of 1 year. If an attorney obtains designated status, renewals of hardship waivers may be sought annually for as long as the hardship exists. Approval and renewal of hardship waivers are within the discretion of the General Counsel (or designee). d) Sole practitioners seeking a hardship waiver must state what their present annual premium is and what it would cost to get $1,000,000/$1,000,000 with $20,000 deductible and $500,000/$1,000,000 with $20,000 deductible. All other relevant financial information should also be provided.
SOP 50 10 8 C.Ch2.C.4.ii.iv
iv. Attendance at an SBA approved 504 loan closing training course. Attorneys may fulfill this requirement up to 1 year prior to designation or within 6 months after designation; and v. Adequate expertise in 504 loan closings. Process to request Designated Attorney status: i. The CDC nominates the attorney by submitting an application to Lead District Office in which the attorney’s practice is primarily located. An application must include: a) A submission on the attorney’s letterhead addressing each of the conditions in the previous paragraph; b) A copy of the attorney’s malpractice insurance policy, or a certificate of insurance or declarations page showing the: i) Amount of coverage and deductible; ii) Premium; and iii) Name of the attorney insured. c) If the attorney requests a hardship exemption with respect to the insurance policy limits or a waiver of the amount of the deductible, the attorney must include the request with the application, supported by appropriate information, including: i) The amount of their policy limits or deductible; and ii) The current premium; iii) The quote obtained for the increased premium to meet SBA’s minimum professional malpractice insurance requirements (absent a hardship waiver); iv) The size of the firm; v) The firm’s arrangement for covering the deductible, such as a loss reserve or escrow; vi) Evidence of the firm’s history and financial strength; and vii) For sole practitioners or law firms with fewer than three attorneys, personal financial statements for each attorney seeking Designated Attorney status. Other Restrictions/Requirements: i. A designated attorney cannot be: a) An employee of the CDC or of an Associate of the CDC; or b) On the board of the CDC, participate in its lending decisions, or otherwise be too closely associated with the CDC, as determined by SBA counsel. ii. An attorney may be a member of the CDC, but not an officer, provided SBA counsel determines the attorney is not too closely associated with the CDC. SBA counsel must consider the attorney’s relationship with the CDC including: a) The degree of control exerted by the attorney on the CDC’s decision- making; b) Any benefits accruing to the attorney through the attorney’s association with the CDC; and c) Any appearance of conflict of interest. The Lead District Office forwards the application to the Office of General Counsel (OGC) with the recommendations of the District Director, District Counsel and other SBA District Offices, if applicable. OGC will notify the attorney in writing of acceptance by SBA as a designated 504 closing attorney. The Lead District Office must allow a CDC to use a non-designated attorney for a reasonable time to develop an additional designated attorney or to replace a designated attorney. In either event, SBA counsel will accept the closing package from a non-designated attorney and conduct a non-priority closing review. To maintain Designated Attorney status, an attorney must:
SOP 50 10 8 C.Ch2.C.4.i
i. Deliver annually to the 504 Loan Program Division on or before the renewal of the current policy: a) A certificate from its insurance carrier confirming the existence of professional malpractice insurance in the amount identified in Subparagraph a.iii above. If seeking a hardship waiver or a renewal of an existing hardship waiver, the Designated Attorney must provide: i) The current amount of their policy limits or deductible; ii) The current premium; iii) The quote obtained for the increased premium to meet SBA’s minimum professional malpractice insurance requirements (absent a hardship waiver); iv) The size of the firm; v) The firm’s arrangement for covering the deductible, such as a loss reserve or escrow; vi) Evidence of the firm’s history and financial strength; and vii) For sole practitioners or law firms with fewer than three attorneys, personal financial statements for each attorney seeking designated status. b) Evidence of continued membership and good standing in the bar(s) of all states in which the attorney is approved to serve as designated counsel. ii. Notify SBA immediately if there is a change of status (e.g., new address, new law firm or change in malpractice coverage); and
SOP 50 10 8 C.Ch2.C.4.i.iii
iii. Submit evidence of attendance at an SBA-approved closing update course every 2 years. The attorney may take the course any time within the calendar year that their status would expire to maintain their status. Withdrawal of Designated Attorney status: The General Counsel, or designee, may withdraw an attorney’s Designated status for good cause, including, but not limited to: unprofessional or unethical conduct; failure to maintain the required insurance coverage; failure to attend the required training; submission of unsatisfactory 504 closing packages (based upon reviews or other evidence); failure to maintain a good working relationship and good communication with SBA; failure to maintain membership and good standing in the bar(s) of all states in which the attorney is approved to serve as designated counsel; and/or failure to comply materially with an SBA Loan Program Requirement. 5. Closing and Post-Closing Activities a. CDC’s Responsibilities The CDC must:
SOP 50 10 8 C.Ch2.C.5.i
i. Certify that the Project costs were paid in full and that the Project proceeds were used in accordance with the requirements of the E-Tran Terms and Conditions, and that each party to the Project contributed the required amount to the costs. To support this certification, the CDC must have evidence of the use of proceeds and the contributions by each party (Third Party Lender, Interim Lender, and Borrower). Sufficient evidence is: a) For the purchase of land and/or building, a signed or certified Settlement Statement, or its equivalent, showing the amounts paid and whether paid by the Borrower or from the Third Party Lender or Interim Lender’s loan proceeds. b) For construction or renovations, i) Copy of construction contract and all change orders; ii) Evidence of each progress payment and final payment of project reflecting cumulative costs and source of payment (Third Party Lender, Interim Lender, or Borrower); iii) If a construction escrow account is used as set forth in this SOP, copies of paid invoices and a copy of the cancelled check made payable to the Borrower and the designated contractor; and iv) Copy of Mechanic’s Lien Releases, if applicable. c) For debt refinancing, a copy of the transcript of account and settlement statement. d) For all other costs, a settlement statement or copies of the paid invoices and cancelled checks or evidence of wire transfers. e) No funds should be paid directly to the Borrower unless the CDC obtains evidence of the Borrower’s payments (cancelled checks and paid invoices).
SOP 50 10 8 C.Ch2.C.5.i.ii
ii. Notify SBA counsel in writing of planned debenture closings at least 30 days before the SBA District Office deadline for CDCs to submit closing packages. This notification is for SBA counsel’s planning purposes only and the CDC may ultimately submit more, fewer or different closing packages.
SOP 50 10 8 C.Ch2.C.5.i.iii
iii. Request from the SLPC all necessary modifications to the E-Tran Terms and Conditions before submitting closing packages as far in advance of submitting the loan closing package as possible. The CDC must obtain SBA approval of all such issues before submitting the closing package to the SBA District Office.
SOP 50 10 8 C.Ch2.C.5.i.iv
iv. Each CDC must issue a written opinion based upon financial statements current within 120 calendar days from the published Central Servicing Agent (CSA) Cut-Off Date for the applicable Debenture Funding Date that to the best of its knowledge there has been no unremedied substantial adverse change in the Applicant’s (or Operating Company’s) ability to repay the 504 loan since its submission of the loan application to SBA. This CDC opinion must be made within 14 business days prior to its request to SLPC to ship the file, and the CDC opinion must be supported by financial statements that are dated no earlier than 120 calendar days from the published CSA Cut-Off Date for the applicable Debenture Funding Date. v. For all 504 loans except ALP and PCLP, CDCs must provide its finding to the SLPC along with copies of the financial statements. The SLPC either will notify the CDC of its approval or, if SBA disagrees with the CDC’s determination of no unremedied substantial adverse change, the debenture will not close until SBA has been satisfied that any adverse change has been remedied. ALP and PCLP CDCs must submit the closing package to SBA counsel and retain the finding and copies of the financial statements on which they relied in their files. vi. If the debenture closing is not consummated in the month following the CDC’s opinion of no unremedied substantial adverse change, the CDC must prepare a new opinion and follow the same process described above if the financial statement supporting the opinion will be more than 120 days old when the CDC requests the file from the SLPC for closing. For example, if a CDC’s opinion of no unremedied substantial adverse change is made and approved in April, the debenture may be funded in May or June if the financial statements supporting the opinion remain no more than 120 days old at the time the request for the file is made. Otherwise, the CDC must submit a new opinion to the SLPC in the same manner noted above.
SOP 50 10 8 C.Ch2.C.5.i.vii
vii. Request that access to each E-Tran Terms and Conditions approval and all modifications be granted by the SLPC to the SBA counsel for closing in time to meet the SBA District Office’s deadline for submission of loan closing packages. CDCs must not request access to the E-Tran Terms and Conditions and modifications unless the debenture is ready for closing and sale during the month following the request. If access has not been granted to SBA counsel by its loan closing package submission deadline, SBA counsel may hold over the package for the next month’s debenture sale.
SOP 50 10 8 C.Ch2.C.5.i.viii
viii. Electronically submit closing packages by the deadline established by SBA counsel. No late closing packages will be accepted. SBA counsel will hold late packages over for the next month’s debenture sale.
SOP 50 10 8 C.Ch2.C.5.i.ix
ix. Use only the 504 Debenture Closing Checklist and submit documents in the order appearing on the Checklist. In the column labeled “CDC” on the Checklist, the CDC must check off each document the CDC has included in the closing package or for documents not applicable to a particular transaction, write “NA” in the block. CDC must submit only a copy of each document and must retain the original until SBA counsel completes their review. After the debenture sale, the CDC must retain a copy of the closing package in its files and make it available to SBA upon request.
SOP 50 10 8 C.Ch2.C.5.x
x. Hold all original loan documents until SBA gives the CDC written notification that SBA has completed its review of the closing package and approved the debenture sale. If SBA counsel determines that the loan is ready for funding, SBA counsel must notify the CDC and CSA that the debenture is ready for sale. If the SBA counsel determines that changes are needed in the closing documents, SBA must notify the CDC of such changes before the cut-off-date by which the CSA must receive documents from the CDC for the debenture sale. After the CDC makes the necessary changes and SBA has approved the changes, SBA must notify the CDC and CSA that the debenture is ready for sale.
SOP 50 10 8 C.Ch2.C.5.x.xi
xi. Send by overnight mail to the CSA the necessary debenture closing documents for the debenture sale. After SBA sends the CDC notice of which debentures SBA has approved for sale, the CDC must send to the CSA by overnight mail the following debenture closing documents for each debenture to be sold: a) SBA Form 1506, “Servicing Agent Agreement” (original); b) SBA Form 1504, “Development Company 504 Debenture” (original); c) SBA Form 1505, “Note (CDC/504 Loans)” (copy); d) Authorization Agreement for Preauthorized Payment (Debit) and voided check (original); e) IRS Form W-9, “Request for Taxpayer ID Number and Certification” (original); and f) Third Party Lender participation fee check (if not being deducted from the CDC processing fee) (original).
SOP 50 10 8 C.Ch2.C.5.x.xii
xii. Forward the original of all documents listed on SBA Form 2286, “504 Debenture Closing Checklist,” (Checklist) (which serves as the original collateral listing) to the appropriate CLSC within 30 days after the debenture sale. a) The CDC must forward the collateral file containing all the original documents listed on the Checklist to the CLSC. The CDC must use the Checklist as the collateral listing. The CDC must maintain the collateral file in a manner acceptable to SBA. b) If the CDC has not yet received all original documents by 30 days after the debenture sale date, the CDC must send the documents it does have and must send additional documents along with a collateral listing upon receipt.
SOP 50 10 8 C.Ch2.C.5.x.xiii
xiii. Ensure that all recorded interim lender documents are canceled of record (officially canceled at the place of recordation, as required by law) within 90 days after funding. xiv. If a 504 loan is canceled after closing but before funding. Ensure that all recorded documents are canceled of record. b. SBA Counsel’s Responsibilities SBA Counsel Must:
SOP 50 10 8 C.Ch2.C.5.i
i. Issue an annual 504 debenture closing schedule with SBA District Office deadlines for receiving closing packages. SBA counsel responsible for debenture closing in each SBA District Office must make available an annual schedule of the deadlines for receipt of both regular and expedited closing packages for each monthly debenture sale to the public and to CDCs who regularly submit closing packages to the district.
SOP 50 10 8 C.Ch2.C.5.i.ii
ii. Review closing packages. SBA counsel must use the standard Checklist to review the 8 documents submitted for an expedited closing and 13 documents submitted for a regular closing. If SBA counsel has concerns that SBA may be at material risk if the debenture is sold, then SBA counsel must contact the CDC and identify what information is reasonably necessary to address that concern. If the CDC is unable to provide the information or otherwise alleviate the concern, then the debenture will not be submitted for sale. In addition, SBA counsel must verify that the information the CDC entered onto the Debenture, Note, and Servicing Agent Agreement forms is accurate and complete.
SOP 50 10 8 C.Ch2.C.5.i.iii
iii. Notify CDCs of deficiencies. SBA counsel may reject late packages or packages that do not meet the standards for debenture sale. If the SBA counsel determines that changes are needed in the closing documents of packages approved for sale, SBA counsel must notify the CDC of such changes before the deadline upon which the CDC must mail the documents to CSA for the debenture sale. If SBA counsel rejects a package, SBA counsel must notify the CDC that SBA will not include the package in the scheduled sale and advise the CDC in writing of what the CDC needs to correct for the package to meet the standards for sale. The CDC may resubmit the package for a future sale with the required changes. iv. If SBA counsel discovers an issue in reviewing the closing package that impacts closing of the loan, SBA counsel will advise the CDC and CDC Counsel. If the issue cannot be resolved, then SBA counsel will notify the Area Counsel of the issue, who will make a recommendation to OGC and OCA for a final decision.
SOP 50 10 8 C.Ch2.C.5.v
v. Issue an SBA counsel closing opinion. Once SBA counsel is satisfied with the loan closing package (including that the CDC has made all necessary changes to the closing documents as identified by SBA counsel), SBA counsel must issue an opinion pursuant to 13 CFR § 120.960(c) stating that the debenture may be closed, SBA may execute its guarantee, and the debenture may be sold. The SBA counsel’s Opinions should be sent to the SLPC.
SOP 50 10 8 C.Ch2.C.5.v.vi
vi. Notify the CDC and the CSA which loans SBA has approved for debenture funding. SBA counsel must notify the CDC and the CSA in writing as to which debentures the SBA District Office approves for funding in that month’s sale. vii. Complete File Reviews (CFRs): SBA counsel must conduct a CFR of a random selection of all loan closings, whether those closing packages were submitted by Priority CDCs or non- Priority CDCs, to ensure program integrity. A Complete File Review consists of a review of the items listed on SBA Form 2303, Checklist for Complete File Review.” The number and frequency of CFRs are at the discretion of SBA counsel, but no less than one package per 10 closing packages submitted by each CDC will be reviewed. SBA counsel will notify the CDC when a loan has been selected for a CFR, and the CDC must promptly submit to SBA counsel the applicable items on SBA Form 2303 for that loan. SBA counsel will prepare a written report documenting the CFR and its results, and send a copy of that report to: a) The CDC; b) The CDC’s 504 closing attorney that closed the loan; c) The SBA counsel that reviewed and opined upon the loan closing package; and d) The CLSC loan file. If the CFR reveals closing deficiencies that could result in a loss to SBA, the CDC and/or its closing attorney must promptly correct the deficiencies, if possible. SBA may take other action, including an action against the CDC closing attorney. In the event of a loss, SBA may pursue an action against the CDC under 13 CFR § 120.938(b).
SOP 50 10 8 C.Ch2.C.5.c
c. Central Servicing Agent’s (CSA) Responsibilities The CSA must: i. Review debenture closing documents, package and price debenture for sale, and conduct debenture sale. The CSA notifies the CDC of any changes that need to be made or additional information to be provided before the debenture sale can occur.
SOP 50 10 8 C.Ch2.C.5.c.ii
ii. Complete the Servicing Agent Agreement and Note: The CSA fills in the remaining blanks on the Note and Servicing Agent Agreement, generating conformed pages, and executes the Servicing Agent Agreement.
SOP 50 10 8 C.Ch2.C.5.c.iii
iii. Distribute post-closing documents. The CSA will provide the following documents online: a) The first page of the Note; b) The Note amortization and prepayment schedules; and c) Pages 3 and 4 of the Servicing Agent Agreement. d. Trustee’s Responsibilities The Trustee will provide copies of the Debenture and the Debenture amortization and prepayment schedules to the CDC, CSA, or SBA, as directed.
Operationalizing SBA SOP 50 10 8, C.Ch2.C.4 — Designated Attorney
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-c-ch2-c-4/
· register sba-sop-c-ch2-c-4 · Claude for Compliance. Free to read and download;
see regulatory updates and methodology.