Changes to SBA Approval Process with ROBS Equity Injection
You may have heard that the Small Business Administration has made a few changes to the approval process for SBA loans that are combined with Rollovers for Business Start-ups (ROBS) as the equity injection.
All newly originated SBA loans that use Rollovers for Business Start-ups as the equity injection must be sent through the general SBA approval process (submission of a full package to the SBA office for approval) to secure the guarantee of funds, regardless if a lender has PLP status.
Last week, our leadership team personally spoke with Rosemarie Drake, Chief of the 7(a) program branch at the Small Business Administration’s Office of Financial Assistance. Rosemarie confirmed the process above is effective immediately and will remain in place until the standard operating procedure for 2020 is finalized.
Due to this change, any newly originated SBA loans that use ROBS may take up to 4-6 weeks longer than normal to be approved. Please note, the approval process for any newly originated SBA loans without ROBS has not changed – business as usual on that front.
Our team will continue to work closely with the Small Business Administration to ensure we’re supporting the lender process and addressing any concerns the SBA has with loans utilizing ROBS for the equity injection.
Source: Guidant Financial