What do you have to keep doing after an SBA loan closes?
Short answer
You must keep books, furnish financial statements when asked, pay taxes when due and post SBA Form 722. You also promised not to change ownership or sell assets outside the ordinary course without consent. Source: SOP 50 10 8.1, Sec. B, Ch. 6, Para. D.8.
You keep the promises you made at closing. SOP 50 10 8.1, Sec. B, Ch. 6, Para. D.8 lists the certifications, and SBA Form 1919 repeats many of them.
Ongoing duties (Para. D.8.a)
- Keep proper books and records, and give the lender and SBA access.
- Furnish financial statements or reports annually or when the lender asks.
- Pay federal, state and local taxes when due, including income, payroll, real estate and sales taxes.
- Post SBA Form 722, the Equal Opportunity Poster, where employees and the public can see it.
- Comply with environmental laws on pledged property and business premises.
- Buy American-made equipment and products with loan funds, to the extent practicable.
What needs the lender's written consent (Para. D.8.b)
- A distribution of company assets that would hurt the business's financial condition.
- A change in the ownership structure or interests.
- A sale, lease, pledge or encumbrance of property or assets outside the ordinary course of business.
Other items
- The lender must get evidence of all required licenses within 90 days after final disbursement (Para. D.6).
- Hazard insurance stays in place on pledged assets when SBA requires it (Sec. A, Ch. 5, Para. C.1).
- You may not knowingly lease financed real estate to a business engaged in illegal activity (Para. D.8.a).
Your note and any separate loan agreement can add covenants. Read those too, because lender documents vary (Para. D.9).
Ask lending partners about your loan
Tell us the amount you need and what it is for. We refer you to lenders that may fund businesses like yours, and it costs you nothing.
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