SBA SOP 50 10 8.1, App15.B.1 — Loan Maturities

SOP 50 10 8.1 App15.B.1

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

B. Loan Terms and Conditions 1. Loan Maturities 13 CFR § 120.212 7(a) loans are required to have a stated amortization, loan maturity, and may not have a balloon. a. 7(a) loans that facilitate a change of ownership must not have an amortization that exceeds 10 years, except as provided below for transactions involving Special Purpose Properties. i. Change of ownership transactions that also include the purchase of real estate (formerly referred to as mixed purpose loans) may be structured as either: a) Separate loans, one for the change of ownership and one for real estate (including the 504 program) and must comply with the requirements in Para. C.3.c.; or b) Blended on a weighted average basis, rounded to the nearest full year. When loan proceeds are used to fund a change of ownership and purchase real estate, the maturity may be blended based on the weighted average use of proceeds. Only the portion of the real estate purchase may have an amortization that exceeds 10-years, up to a maximum of a 25-year term. All other uses of proceeds, including those related to soft costs and working capital, must be allocated a 10-year term. This calculation must be made before the application of any equity and clearly stated in the credit memorandum. The SBA 504 program is not eligible for use on a blended basis. c) Special Purpose Properties Exemption: For transactions involving the acquisition of an owner-occupied Special Purpose Property which includes the business operating from that property, the Lender may also structure the loan with a maturity of up to 25 years if 85% or more of the use of the total project costs are for real estate. This provision only applies when the acquisition of the Special Purpose Property cannot be separated from, and is integral to, the acquisition and continued operation of the business. ii. Lenders may fund a portion of the purchase related to the working assets of the firm onto a line of credit as outlined in Section C. Para. 3.d.i.e of this Appendix. b. Real estate loans (including acquisition, rehabilitation, renovation, construction, or improvements to leasehold interests in land) must not exceed 25 years, and follow the requirement set forth in both Standard 7(a) and 7(a) Small, as applicable.

Source: SBA SOP 50 10 8.1, App15.B.1 — Loan Maturities · source URL · snapshot 0fb0c4692cf52938