POLICY UPDATE: SBA Notice: SOP 50 10 5(J) – Revisions to Franchise Review Process for 7(a) and 504 Loans

October 17th, 2017 by Melinda Modica

On October 13, 2017 the SBA released a policy notice regarding their franchise SOP that takes effect January 1st 2018. FRANdata has long served as the franchising gateway to the SBA and we are pleased that they will be utilizing a similar structured approach to many of the franchise affiliation and business eligibility solutions in their current version of their platform. Technically, the SBA will be posting a list on its website of all franchise brands reviewed by SBA that are eligible for SBA financial assistance, as well other information that lenders need in order to process their franchise loans.  We will monitor that list, make sure it reflects what our Franchise Registry Membership clients expected, and continue to incorporate components that lenders would like to see on the Franchise Registry as they evaluate and underwrite franchise brands.

With any such sweeping governmental policy change confusion is inevitable and mistakes will be made.  We anticipate an ebb and flow of further revisions as feedback comes in from both lender users and borrowers affected by these changes. As always, we will address listing issues for our clients and work closely with the International Franchise Association to address policy matters that affect the franchise community.

While we are hopeful that this latest revised policy will make it easier for SBA lenders to properly document franchise loans.  Government policy change aimed at business never is a painless process for anyone involved.  Our goal is to make sure your franchisees are not suffering as a result of negligence or oversight.  Rest assured we will closely monitor your SBA status as part of your franchise registry membership. Our team continues to work to ensure that your brand has as much access to capital as needed for growth, including SBA loans.  We will keep you up-to-date with whatever actions you need to take as the SBA continues to figure out and fabricate their franchise platform.

If you have any questions or concerns feel free to contact your client advisor or email us at franchiseregistry@frandata.com.

 

SBA Policy Notice

Franchise Registry Membership

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