13 CFR 120.434 - What are SBA's requirements for loan pledges?

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There is 1 rule appearing in the Federal Register for 13 CFR 120. View below or at eCFR (GPOAccess)
§ 120.434 What are SBA's requirements for loan pledges?
(a) Except as set forth in § 120.435, SBA must give its prior written consent to all pledges of any portion of a 7(a) loan, which consent SBA may withhold in its sole discretion;
(b) The Lender must be in good standing with SBA as defined in § 120.420(f) and determined by SBA in its discretion;
(c) The Lender has satisfactory SBA performance, as determined by SBA in its discretion. The Lender's Risk Rating, among other factors, will be considered in determining satisfactory SBA performance. Other factors may include, but are not limited to, on-site review/examination assessments, historical performance measures (like default rate, purchase rate and loss rate), loan volume to the extent that it impacts performance measures, and other performance related measurements and information (such as contribution toward SBA mission);
(d) All loan documents must be satisfactory to SBA and must include a multi-party agreement among SBA, Lender, the pledgee, FTA and such other parties as SBA determines are necessary;
(e) The Lender must use the proceeds of the loan secured by the 7(a) loans only for financing 7(a) loans and for costs and expenses directly connected with the borrowing for which the loans are pledged;
(f) The Lender must remain the servicer of the loans and retain possession of all loan documents other than the original promissory notes;
(g) The Lender must deposit the original promissory notes at the FTA; and
(h) The Lender must retain an economic interest in and the ultimate risk of loss on the unguaranteed portion of the loans.
[64 FR 6507-6509, Feb. 10, 1999, as amended at 73 FR 75511, Dec. 11, 2008]

Title 13 published on 2014-01-01

The following are only the Rules published in the Federal Register after the published date of Title 13.

For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2014-03-21; vol. 79 # 55 - Friday, March 21, 2014
    1. 79 FR 15641 - 504 and 7(a) Loan Programs Updates
      GPO FDSys XML | Text
      SMALL BUSINESS ADMINISTRATION
      Final rule.
      This rule is effective April 21, 2014, except for the amendment to 13 CFR 120.823, which is effective April 21, 2015.
      13 CFR Part 120

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United States Code
Statutes at Large

Title 13 published on 2014-01-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 13 CFR 120 after this date.

  • 2014-03-21; vol. 79 # 55 - Friday, March 21, 2014
    1. 79 FR 15641 - 504 and 7(a) Loan Programs Updates
      GPO FDSys XML | Text
      SMALL BUSINESS ADMINISTRATION
      Final rule.
      This rule is effective April 21, 2014, except for the amendment to 13 CFR 120.823, which is effective April 21, 2015.
      13 CFR Part 120