SBA SOP 50 10 8.1, C.Ch1.F.2 — Contents of a 504 Loan Application

2. Contents of a 504 Loan Application The CDC must maintain the following documents and any that support the CDC’s credit decision in the CDC’s loan files. CDC files must be available for review by SBA at any time. a. The CDC completes or obtains the following:

i. SBA Form 1244, “Application for Section 504 Loan.” CDC must list in the SBA Loan System 100% of the total direct and indirect ownership of the Applicant. The ownership percentage of married spouses and minor children must be combined. Additional sheets may be attached to the Form 1244 if necessary. The Applicant is not eligible for a 504 loan if any Associate (as defined in 13 CFR § 120.10) responds “Yes” to the question regarding criminal history on SBA Form 1244.

ii. CDC credit memorandum, in accordance with Paragraph E.1, CDC Credit Memorandum, of this Chapter.

iii. For any 504 project with total project costs of at least $5,000,000, the CDC must obtain and retain the Third Party Lender’s underwriting analysis and incorporate it into the CDC credit memorandum in accordance with Paragraph C.1.b. of this Chapter. If the TPL has not provided their credit memorandum or underwriting analysis to the CDC, they must submit the analysis directly to SBA in accordance with Paragraph E., 1., b. of this Chapter.

iv. Copies of key cost documents such as contractor costs, estimates, vendor quotes for machinery and equipment, etc., as well as an itemized listing of estimated professional fees (e.g., appraiser, architect, legal, etc.). Full or partially executed purchase/sale agreements must be included.

v. Independent appraisal for project real estate as required by Paragraph 2.b. of this Chapter.

vi. Environmental analysis in accordance with Section A, Ch. 5, Para. E, Environmental Policies and Procedures, if applicable.

vii. SBA Form 2481, “Historic Property Borrower Certification,” if applicable, in accordance with Section A, Ch. 5, Para. D., Historic Properties.

viii. Letter of intent/term sheet from the Third Party Lender stating the terms and conditions and the reason why it will not finance the entire project.

ix. Completed SBA Form(s) 159, “Fee Disclosure Form and Compensation Agreement,” if applicable, in accordance with Section A, Ch. 4, Para. E.7, Disclosure of Fees – SBA Form 159.

x. For “Debt Refinance With Expansion” projects: a) Copies of the most current debt and lien instruments; b) Transcript of account or equivalent for any debts being refinanced; and c) Certifications required for refinancing.

xi. For “Debt Refinance Without Expansion” projects: a) Copies of the transcript(s) of account or equivalent for any debts being refinanced; and b) Certifications required for refinancing.

xii. SBA Form 413, Personal Financial Statement (or CDC’s equivalent form), signed and dated within 90 days, as well as copies of Federal income tax returns for the last 1 year, for each: a) Proprietor, partner, or stockholder with 20% or more ownership of the Applicant or the OC, if the Applicant is an EPC; and b) If different than a) immediately above, each owner with 20% or more ownership of the EPC; and c) Any proposed guarantors, except Supplemental Guarantors.

xiii. Credit reports, dated within 90 days, for: a) Applicant; b) Proprietor, partner, or stockholder with 20% or more ownership of the Applicant, and, if requested by SLPC, Key Employee; c) Affiliates; and d) Guarantors.

xiv. If the Applicant is meeting SBA Size Standards under the: a) Alternative Size Standard – Include balance sheets, income statements, and tax returns for the previous 2 years or the number of years the Applicant has generated revenue, whichever is less; b) Industry Size Standard–- Include balance sheets, income statements, and tax returns for the previous 3 years, or the number of years the Applicant has generated revenue, whichever is less.

xv. A balance sheet and income statement dated within 120 days prior to submission to SBA and an aging of the accounts receivable and accounts payable. If the Applicant is a new business, provide a proforma balance sheet with a description of assumptions attached.

xvi. Where appropriate, projected annualized income statements for the first 2 years after loan closing including a description of assumptions.

xvii. For a new business, a monthly cashflow analysis for the first 12 months of operations or for 3 months beyond the breakeven point (whichever is longer) together with a description of assumptions.

xviii. Schedule of debts including the original date and amount, monthly payment, status of the loan (current, delinquent, paid in full, or charged off), interest rate, present balance owed, maturity, to whom payable, and collateral securing the loan for each short-term and long-term loan that the business currently has outstanding or has planned for the next 12 months (other than the 504 loan). xix. Schedule of any previous government financing received by the Applicant or any affiliated company of the Applicant as well as any Associate (as defined by 13 CFR § 120.10) or principal of the Applicant. Include the name of the Agency, the original date and amount, the outstanding balance, status of the loan (current, delinquent, paid in full, or charged off), and collateral securing the loan. xx. Names of affiliated or subsidiary businesses as well as the last 2 fiscal year-end financial statements and/or Federal income tax returns for the last 2 years (or 3 years, if the Industry Size Standard is used to qualify for SBA Size Standard). xxi. IRS Form 4506-C, IVES Request for Transcript of Tax Return or IRS Form 8821, Tax Information Authorization. CDCs must select the same type of form the CDC used when verifying borrower financial information. xxii. Documentation of U.S. National in accordance with Section A, Ch. 1, Para. F., “Citizenship and Residency Requirements”. CDCs must receive verification of the status of each U.S. National. CDC must document their findings of the review proving a U.S. National’s status (birth certificate and/or passport) in the loan file, and enter the U.S. National’s Social Security Number on the Application in the SBA Loan System. xxiii. Not required until loan closing: IRS Transcripts and complete verification of borrower financial information. b. Due to the certification on SBA Form 1244, original signatures from the Applicant are not required on the following: i. Balance sheet, income statement, and Federal income tax returns (business or personal); ii. Aging of the accounts receivable and accounts payable listed; iii. Financial statements and/or Federal income tax returns for affiliated entities and subsidiary businesses; and iv. SBA Form 413, Personal Financial Statement or CDC’s equivalent, dated within 90 days of loan approval.