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SBA finalizes lending rule aimed at encouraging more businesses to apply

via The Business Journals

"The Small Business Administration has finalized a new rule designed to encourage more businesses to apply for its loans.

The new rule, published Monday in the Federal Register, focuses on affiliation and lending criteria for the SBA's business loan programs, as well as the appeals process for denied loans.

The newly finalized rule would make it easier for employees to use SBA loans to purchase portions of the business they work for. Before, 7(a) loans could only be used if the employee — or group of employees — wanted to purchase the entire interest of an owner in the company."


"The new rule also streamlines SBA’s affiliation requirements, which had been a longstanding series of guideposts on who exercised control over the business. The new rule instead focuses on who owns the business, which is good news for some franchises, as well as businesses where the owner has delegated their authority to others to run."