SBA SOP 50 10 8.1, A.Ch4.A — Ethical Requirements

SOP 50 10 8.1 A.Ch4.A

Effective 2026-10-01 · publisher's stamp for this provision

A. Ethical Requirements 1. Conflicts of Interest: Neither an SBA Lender nor its Associates may have a real or apparent conflict of interest with a small business with which it is dealing or SBA (13 CFR § 120.140 and 13 CFR Part 105). SBA Lenders must exercise care and judgment in determining whether a conflict of interest exists and document the file in detail. SBA will not guarantee a loan if the SBA Lender, its Associates, partner(s), or a close relative:  Has a direct or indirect financial or other interest in the Applicant; or  Had such interest within 6 months prior to the date of application. SBA is released from liability on its guaranty, in its discretion, if the SBA Lender, its Associates, partner(s) or a close relative acquires such an interest at any time during the term of the loan. 2. Standards of Conduct Reviews for Applicants a. The Standards of Conduct Counselor for the Agency is the Designated Agency Ethics Official. 13 CFR § 105.402(a) b. If an Applicant has, as an employee, owner, general partner, managing member, attorney, agent, owner of stock, officer, director, creditor or debtor, an individual who, within 1 year prior to the loan application, was an SBA Employee (as defined by 13 CFR § 105.201(a)), the loan application must be approved by the Standards of Conduct Counselor. 13 CFR § 105.203(a) c. If an Applicant has, as its sole proprietor, general partner, managing member, officer, director, or stockholder with a 10% or more interest, an individual who is an SBA Employee (as defined by 13 CFR § 105.201(a)) or a Household Member of an SBA Employee, the loan application must be approved by the Standards of Conduct Committee at SBA Headquarters. (13 CFR § 105.204) A “Household Member” of an SBA Employee includes: i. The spouse of the Employee; ii. The minor children of the Employee; and iii. The blood relatives of the Employee, and the blood relatives of the Employee’s spouse, who reside in the same place of abode as the Employee. 13 CFR § 105.201(d) d. If an Applicant has, as its sole proprietor, general partner, managing member, officer, director, or stockholder with a 10% or more interest, or a Household Member of such individual, an individual who is a Member of Congress, an appointed official or employee of the legislative or judicial branch of the Federal Government, a member or employee of a Small Business Advisory Council, or a SCORE volunteer, the loan application must be approved by the Standards of Conduct Committee. 13 CFR §§ 105.301(c) and 105.302(a). e. When a Standards of Conduct approval is required, the application should be processed by the appropriate processing center and, if appropriate, be conditionally approved and forwarded to the Standards of Conduct Counselor or Standards of Conduct Committee (through the Standards of Conduct Counselor). The Standards of Conduct Counselor will notify the processing center of the final Agency decision, and the processing center will notify the SBA Lender accordingly. 3. Other Government Employees: a. The Applicant must submit to the SBA Lender a statement of no objection signed by the appropriate ethics official of the pertinent department or military service if its sole proprietor, general partner, managing member, officer, director, or stockholder with a 10% or more interest, or a Household Member of such individual, is an employee of another department or agency of the Federal Government (Executive Branch) in a grade of at least GS-13 (or its equivalent). SBA requires a new statement of no objection for each loan. b. SBA Lenders must submit the statement as a PDF attachment to SNOMemos@sba.gov and receive written clearance from SBA prior to submitting the application to the SBA loan processing center (non-delegated) or processing the application under their delegated authority. SBA Lenders processing a loan under non-delegated procedures must submit a copy of SBA’s written clearance with the application to the SBA loan processing center. (13 CFR § 105.301(a)) SBA Lenders processing a loan under delegated procedures must retain SBA’s written clearance in the loan file. SBA will review the statements when conducting lender oversight activities and, for 7(a) loans, the statement must be included in any request for SBA to honor its guaranty in the event of default by the Borrower.

Source: SBA SOP 50 10 8.1, A.Ch4.A — Ethical Requirements · source URL · snapshot 0fb0c4692cf52938