Proposed Rules – Small Business Administration
The U.S. Small Business Administration (SBA) recently published proposed amendments to various regulations governing SBA’s 7(a) Loan Program and 504 Loan Program. Within these proposed amendments, the SBA is proposing a rule to modify the requirement for hazard insurance on all 7(a) and 504 loans. Currently, the regulation requires hazard insurance on all collateral and does not distinguish this requirement by loan size. SBA proposes to modify the requirement for hazard insurance for all 7(a) and 504 loans $150,000 and under to create flexibility for SBA Lenders. SBA proposes revising this regulation to state that SBA requires hazard insurance for loans greater than $150,000. SBA will include guidance in the Loan Program Requirements for loans of $150,000 or under.
Commentary on this proposed rule must be submitted on or before December 19, 2022.
The proposed rule and directions to submit commentary can be found here: Federal Register :: Small Business Investment Company Investment Diversification and Growth
If you have questions regarding potential impact to your entity’s business rules in the event these rules are made final, please reach out to your relationship manager. The Proctor Loan Protector Compliance Team will continue to monitor this topic and provide updates as they develop.