Can you add or remove an owner after an SBA loan closes?
Short answer
Only with the lender's prior written consent. A 504 Certified Development Company (CDC) cannot approve a change on its own for 12 months after final disbursement. New owners must meet SBA's citizenship rules. Sources: SOP 50 10 8.1, Sec. B, Ch. 6, Para. D.8.b; Sec. C, Ch. 2, Para. C.7.
Only with consent. You certified before disbursement that you would not change the ownership structure without the lender's prior written consent (SOP 50 10 8.1, Sec. B, Ch. 6, Para. D.8.b).
7(a) loans
SOP 50 57 and SBA's Lender Matrix decide whether the lender must notify SBA or get approval. Those documents are not among the sources behind this page. SBA has said a lender may modify ownership on an existing loan under SOP 50 57. New owners cannot be Ineligible Persons (Information Notice 5000-877673, question 6).
504 loans
A CDC may not unilaterally approve any change in a borrower's ownership, including a change in percentage, for 12 months after final disbursement (Sec. C, Ch. 2, Para. C.7, about p. 282).
Before funding, ownership changes need SBA's approval. On a Premier Certified Lenders Program (PCLP) loan, SBA first verifies loan limits and that the new owner has no prior loss to the government (Sec. C, Ch. 2, Para. B).
Rules for the new owner
- New owners and required guarantors must be U.S. Citizens or U.S. Nationals with a Principal Residence in the United States (Sec. A, Ch. 1, Para. F).
- The lender enters 100% of ownership on requests to substitute an owner or guarantor (Para. F).
Guarantees
An owner at 20% or more generally must guarantee a loan (Sec. A, Ch. 5, Para. A.1). The sources here do not say how a lender treats existing guarantees after a servicing change. Ask before you close the transaction.
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