What does SBA Form 155 require a standby creditor to do?
Short answer
SBA Form 155 binds a standby creditor to a chosen payment limit, no enforcement until the SBA loan is satisfied, and lien subordination. Payments received in violation must be turned over within 15 days. Source: SBA Form 155 (9/98).
SBA Form 155 is the Standby Creditor's Agreement. It restricts how a creditor, such as a seller carrying a note, can collect while the SBA loan is unpaid. Lenders may use Form 155 or their own equivalent, and a copy of the note must be attached (SOP 50 10 8.1, Sec. B, Ch. 1, Para. C.2.b).
The payment box (para. 1)
The creditor checks one option:
- No further payments until the SBA loan is satisfied.
- Interest-only payments until the SBA loan is satisfied or the lender says stop.
- Principal and interest unless the lender says stop.
- Principal and interest beginning on a set date.
Only the first option matches SBA's test for counting debt as equity. That test is full standby for the term of the 7(a) loan, with no payments of principal or interest.
The other promises
- Turn over payments received in violation within 15 days (para. 2).
- Take no action to enforce claims until the SBA loan is satisfied (para. 3).
- Take no action against the borrower's collateral without the lender's written consent (para. 4).
- Sign documents to subordinate any secured interests (para. 5).
What the lender can still do
The lender may modify, extend, defer or settle its loan and release collateralProperty a lender can take and sell if a loan is not repaid. without affecting the agreement (para. 6).
Who it binds
The agreement applies to successors and assignees of the creditor, and to later loans from that creditor unless the lender agrees otherwise (paras. 7 and 8).
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