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Electronic Code of Federal Regulations

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e-CFR Data is current as of September 17, 2014

Title 13Chapter IPart 120


TITLE 13—Business Credit and Assistance

CHAPTER I—SMALL BUSINESS ADMINISTRATION

PART 120—BUSINESS LOANS

rule

General Descriptions of SBA's Business Loan Programs

§120.1
Which loan programs does this part cover?
§120.2
Descriptions of the business loan programs.
§120.3
Pilot programs.

Definitions

§120.10
Definitions.

Subpart A—POLICIES APPLYING TO ALL BUSINESS LOANS

Eligibility Requirements

§120.100
What are the basic eligibility requirements for all applicants for SBA business loans?
§120.101
Credit not available elsewhere.
§120.103
Are farm enterprises eligible?
§120.104
Are businesses financed by SBICs eligible?
§120.105
Special consideration for veterans.

Ineligible Businesses and Eligible Passive Companies

§120.110
What businesses are ineligible for SBA business loans?
§120.111
What conditions must an Eligible Passive Company satisfy?

Uses of Proceeds

§120.120
What are eligible uses of proceeds?
§120.130
Restrictions on uses of proceeds.
§120.131
Leasing part of new construction or existing building to another business.

Ethical Requirements

§120.140
What ethical requirements apply to participants?

Credit Criteria for SBA Loans

§120.150
What are SBA's lending criteria?
§120.151
What is the statutory limit for total loans to a Borrower?
§120.160
Loan conditions.

Requirements Imposed Under Other Laws and Orders

§120.170
Flood insurance.
§120.171
Compliance with child support obligations.
§120.172
Flood-plain and wetlands management.
§120.173
Lead-based paint.
§120.174
Earthquake hazards.
§120.175
Coastal barrier islands.
§120.176
Compliance with other laws.

Applicability and Enforceability of Loan Program Requirements

§120.180
Lender and CDC compliance with Loan Program Requirements.
§120.181
Status of Lenders and CDCs.

Loan Applications

§120.190
Where does an applicant apply for a loan?
§120.191
The contents of a business loan application.
§120.192
Approval or denial.
§120.193
Reconsideration after denial.

Computerized SBA Forms

§120.194
Use of computer forms.

Reporting

§120.195
Disclosure of fees.
§120.197
Notifying SBA's Office of Inspector General of suspected fraud.
rule

Subpart B—POLICIES SPECIFIC TO 7(A) LOANS

Bonding Requirements

§120.200
What bonding requirements exist during construction?

Limitations on Use of Proceeds

§120.201
Refinancing unsecured or undersecured loans.
§120.202
Restrictions on loans for changes in ownership.

Maturities; Interest Rates; Loan and Guarantee Amounts

§120.210
What percentage of a loan may SBA guarantee?
§120.211
What limits are there on the amounts of direct loans?
§120.212
What limits are there on loan maturities?
§120.213
What fixed interest rates may a Lender charge?
§120.214
What conditions apply for variable interest rates?
§120.215
What interest rates apply to smaller loans?

Fees for Guaranteed Loans

§120.220
Fees that Lender pays SBA.
§120.221
Fees which the Lender may collect from a loan applicant.
§120.222
Fees which the Lender or Associate may not collect from the Borrower or share with third parties.
§120.223
Subsidy recoupment fee payable to SBA by Borrower.
rule

Subpart C—SPECIAL PURPOSE LOANS

§120.300
Statutory authority.

Disabled Assistance Loan Program (DAL)

§120.310
What assistance is available for the disabled?
§120.311
Definitions.
§120.312
DAL-1 use of proceeds and other program conditions.
§120.313
DAL-2 use of proceeds and other program conditions.
§120.314
Resolving doubts about creditworthiness.
§120.315
Interest rate and loan limit.

Businesses Owned by Low Income Individuals

§120.320
Policy.

Energy Conservation

§120.330
Who is eligible for an energy conservation loan?
§120.331
What devices or techniques are eligible for a loan?
§120.332
What are the eligible uses of proceeds?
§120.333
Are there any special credit criteria?

Export Working Capital Program (EWCP)

§120.340
What is the Export Working Capital Program?
§120.341
Who is eligible?
§120.342
What are eligible uses of proceeds?
§120.343
Collateral.
§120.344
Unique requirements of the EWCP.

International Trade Loans

§120.345
Policy.
§120.346
Eligibility.
§120.347
Use of proceeds.
§120.348
Amount of guarantee.
§120.349
Collateral.

Qualified Employee Trusts (ESOP)

§120.350
Policy.
§120.351
Definitions.
§120.352
Use of proceeds.
§120.353
Eligibility.
§120.354
Creditworthiness.

Veterans Loan Program

§120.360
Which veterans are eligible?
§120.361
Other conditions of eligibility.

Pollution Control Program

§120.370
Policy.

Loans to Participants in the 8(a) Program

§120.375
Policy.
§120.376
Special requirements.
§120.377
Use of proceeds.

Defense Economic Transition Assistance

§120.380
Program.
§120.381
Eligibility.
§120.382
Repayment ability.
§120.383
Restrictions on loan processing.

CapLines Program

§120.390
Revolving credit.

Builders Loan Program

§120.391
What is the Builders Loan Program?
§120.392
Who may apply?
§120.393
Are there special application requirements?
§120.394
What are the eligible uses of proceeds?
§120.395
What is SBA's collateral position?
§120.396
What is the term of the loan?
§120.397
Are there any special restrictions?

America's Recovery Capital (Business Stabilization) Loan Program—ARC Loan Program

§120.398
America's Recovery Capital (ARC) Loan Program.
rule

Subpart D—LENDERS

§120.400
Loan Guarantee Agreements.

Participation Criteria

§120.410
Requirements for all participating Lenders.
§120.411
Preferences.
§120.412
Other services Lenders may provide Borrowers.
§120.413
Advertisement of relationship with SBA.

Participating Lender Financings

§120.420
Definitions.
§120.421
Which Lenders may securitize?
§120.422
Are all securitizations subject to this subpart?
§120.423
Which 7(a) loans may a Lender securitize?
§120.424
What are the basic conditions a Lender must meet to securitize?
§120.425
What are the minimum elements that SBA will require before consenting to a securitization?
§120.426
What action will SBA take if a securitizer transfers the subordinated tranche prior to the termination of the holding period?
§120.427
Will SBA approve a securitization application from a capital impaired Securitizer?
§120.428
What happens to a securitizer's other PLP responsibilities if SBA suspends its PLP approval privilege?

Other Conveyances

§120.430
What conveyances are covered by §§120.430 through 120.435?
§120.431
Which Lenders may sell, sell participations in, or pledge 7(a) loans?
§120.432
Under what circumstances does this subpart permit sales of, or sales of participating interests in, 7(a) loans?
§120.433
What are SBA's other requirements for sales and sales of participating interests?
§120.434
What are SBA's requirements for loan pledges?
§120.435
Which loan pledges do not require notice to or consent by SBA?

Certified Lenders Program (CLP)

§120.440
The Certified Lenders Program.
§120.441
How does a Lender become a CLP Lender?

Preferred Lenders Program (PLP)

§120.450
What is the Preferred Lenders Program?
§120.451
How does a Lender become a PLP Lender?
§120.452
What are the requirements of PLP loan processing?
§120.453
Responsibilities of PLP Lenders for servicing and liquidating 7(a) loans.

SBA Supervised Lenders

§120.460
What are SBA's additional requirements for SBA Supervised Lenders?
§120.461
What are SBA's additional requirements for SBA Supervised Lenders concerning records?
§120.462
What are SBA's additional requirements on capital maintenance for SBA Supervised Lenders?
§120.463
Regulatory accounting—What are SBA's regulatory accounting requirements for SBA Supervised Lenders?
§120.464
Reports to SBA.
§120.465
Civil penalty for late submission of required reports.

Small Business Lending Companies (SBLC)

§120.470
What are SBA's additional requirements for SBLCs?
§120.471
What are the minimum capital requirements for SBLCs?
§120.472
Higher individual minimum capital requirement.
§120.473
Procedures for determining individual minimum capital requirement.
§120.474
Relation to other actions.
§120.475
Change of ownership or control.
§120.476
Prohibited financing.
§120.490
Audits.
rule

Subpart E—SERVICING, LIQUIDATION AND DEBT COLLECTION LITIGATION OF 7(A) AND 504 LOANS

SBA'S Purchase of a Guaranteed Portion

§120.520
Purchase of 7(a) loan guarantees.
§120.521
What interest rate applies after SBA purchases its guaranteed portion?
§120.522
Payment of accrued interest to the Lender or Registered Holder when SBA purchases the guaranteed portion.
§120.523
What is the “earliest uncured payment default”?
§120.524
When is SBA released from liability on its guarantee?
§120.530
Deferment of payment.
§120.531
Extension of maturity.
§120.532
What is a loan Moratorium?
§120.535
Standards for Lender and CDC loan servicing, loan liquidation and debt collection litigation.
§120.536
Servicing and liquidation actions that require the prior written consent of SBA.
§120.540
Liquidation and litigation plans.
§120.541
Time for approval by SBA.
§120.542
Payment by SBA of legal fees and other expenses.
§120.545
What are SBA's policies concerning the liquidation of collateral and the sale of business loans and physical disaster assistance loans, physical disaster business loans and economic injury disaster loans?
§120.546
Loan asset sales.

Homestead Protection for Farmers

§120.550
What is homestead protection for farmers?
§120.551
Who is eligible for homestead protection?
§120.552
Lease.
§120.553
Appeal.
§120.554
Conflict of laws.
rule

Subpart F—SECONDARY MARKET

Fiscal and Transfer Agent (FTA)

§120.600
Definitions.
§120.601
SBA Secondary Market.

Certificates

§120.610
Form and terms of Certificates.
§120.611
Pools backing Pool Certificates.
§120.612
Loans eligible to back Certificates.
§120.613
Secondary Participation Guarantee Agreement.

The SBA Guarantee of a Certificate

§120.620
SBA guarantee of a Pool Certificate.
§120.621
SBA guarantee of an Individual Certificate.

Pool Assemblers

§120.630
Qualifications to be a Pool Assembler.
§120.631
Suspension or termination of Pool Assembler.

Miscellaneous Provisions

§120.640
Administration of the Pool and Individual Certificates.
§120.641
Disclosure to purchasers.
§120.642
Requirements before the FTA issues Pool Certificates.
§120.643
Requirements before the FTA issues Individual Certificates.
§120.644
Transfers of Certificates.
§120.645
Redemption of Certificates.
§120.650
Registration duties of FTA in Secondary Market.
§120.651
Claim to FTA by Registered Holder to replace Certificate.
§120.652
FTA fees.

Suspension or Revocation of Participant in Secondary Market

§120.660
Suspension or revocation.
rule

Subpart G—MICROLOAN PROGRAM

§120.700
What is the Microloan Program?
§120.701
Definitions.
§120.702
Are there limitations on who can be an Intermediary or on where an Intermediary may operate?
§120.703
How does an organization apply to become an Intermediary?
§120.704
How are applications evaluated?
§120.705
What is a Specialized Intermediary?
§120.706
What are the terms and conditions of an SBA loan to an Intermediary?
§120.707
What conditions apply to loans by Intermediaries to Microloan borrowers?
§120.708
What is the Intermediary's financial contribution?
§120.709
What is the Microloan Revolving Fund?
§120.710
What is the Loan Loss Reserve Fund?
§120.711
What rules govern Intermediaries?
§120.712
How does an Intermediary get a grant to assist Microloan borrowers?
§120.713
Does SBA provide technical assistance to Intermediaries?
§120.714
How are grants made to non-lending technical assistance providers (NTAP)?
§120.715
Does SBA guarantee any loans an Intermediary obtains from another source?
rule

Subpart H—DEVELOPMENT COMPANY LOAN PROGRAM (504)

§120.800
The purpose of the 504 program.
§120.801
How a 504 Project is financed.
§120.802
Definitions.

Certification Procedures To Become a CDC

§120.810
Applications for certification as a CDC.
§120.812
Probationary period for newly certified CDCs.

Requirements for CDC Certification and Operation

§120.816
CDC non-profit status and good standing.
§120.818
Applicability to existing for-profit CDCs.
§120.820
CDC Affiliation.
§120.821
CDC Area of Operations.
§120.823
CDC Board of Directors.
§120.824
Professional management and staff.
§120.825
Financial ability to operate.
§120.826
Basic requirements for operating a CDC.
§120.827
Other services a CDC may provide to small businesses.
§120.828
Minimum level of 504 loan activity and restrictions on portfolio concentrations.
§120.829
Job Opportunity average a CDC must maintain.
§120.830
Reports a CDC must submit.

Extending a CDC'S Area of Operations

§120.835
Application to expand an Area of Operations.
§120.837
SBA decision on application for a new CDC or for an existing CDC to expand Area of Operations.
§120.839
Case-by-case application to make a 504 loan outside of a CDC's Area of Operations.

Accredited Lenders Program (ALP)

§120.840
Accredited Lenders Program (ALP).
§120.841
Qualifications for the ALP.

Premier Certified Lenders Program

§120.845
Premier Certified Lenders Program (PCLP).
§120.846
Requirements for maintaining and renewing PCLP status.
§120.847
Requirements for the Loan Loss Reserve Fund (LLRF).
§120.848
Requirements for 504 loan processing, closing, servicing, liquidating, and litigating by PCLP CDCs.

Associate Development Companies (ADCs)

§120.850
Expiration of Associate Development Company designation.

Other CDC Requirements

§120.851
CDC ethical requirements.
§120.852
[Reserved]
§120.853
Inspector General audits of CDCs.
§120.857
Voluntary transfer and surrender of CDC certification.

Project Economic Development Goals

§120.860
Required objectives.
§120.861
Job creation or retention.
§120.862
Other economic development objectives.

Leasing Policies Specific to 504 Loans

§120.870
Leasing Project Property.
§120.871
Leasing part of Project Property to another business.

Loan-Making Policies Specific to 504 Loans

§120.880
Basic eligibility requirements.
§120.881
Ineligible Projects for 504 loans.
§120.882
Eligible Project costs for 504 loans.
§120.883
Eligible administrative costs for 504 loans.
§120.884
Ineligible costs for 504 loans.

Interim Financing

§120.890
Source of interim financing.
§120.891
Certifications of disbursement and completion.
§120.892
Certifications of no adverse change.

Permanent Financing

§120.900
Sources of permanent financing.

The Borrower's Contribution

§120.910
Borrower contributions.
§120.911
Land contributions.
§120.912
Borrowed contributions.
§120.913
Limitations on any contributions by a Licensee.

Third Party Loans

§120.920
Required participation by the Third Party Lender.
§120.921
Terms of Third Party loans.
§120.922
Pre-existing debt on the Project Property.
§120.923
Policies on subordination.
§120.925
[Reserved]
§120.926
Referral fee.

504 Loans and Debentures

§120.930
Amount.
§120.931
504 Lending limits.
§120.932
Interest rate.
§120.933
Maturity.
§120.934
Collateral.
§120.935
Deposit from the Borrower that a CDC may require.
§120.937
Assumption.
§120.938
Default.
§120.939
Borrower prohibition.
§120.940
Prepayment of the 504 loan or Debenture.
§120.941
Certificates.

Debenture Sales and Service Agents

§120.950
SBA and CDC must appoint agents.
§120.951
Selling agent.
§120.952
Fiscal agent.
§120.953
Trustee.
§120.954
Central Servicing Agent.
§120.955
Agent bonds and records.
§120.956
Suspension or revocation of brokers and dealers.

Closings

§120.960
Responsibility for closing.
§120.961
Construction escrow accounts.

Servicing

§120.970
Servicing of 504 loans and Debentures.

Fees

§120.971
Allowable fees paid by Borrower.
§120.972
Third Party Lender participation fee and CDC fee.

Authority of CDCs To Perform Liquidation and Debt Collection Litigation

§120.975
CDC Liquidation of loans and debt collection litigation.

Enforceability of 501, 502 and 503 Loans and Other Laws

§120.990
501, 502 and 503 loans.
§120.991
Effect of other laws.
rule

Subpart I—RISK-BASED LENDER OVERSIGHT

Supervision

§120.1000
Risk-Based Lender Oversight.
§120.1005
Bureau of PCLP Oversight.
§120.1010
SBA access to SBA Lender, Intermediary, and NTAP files.
§120.1015
Risk Rating System.
§120.1025
Off-site reviews and monitoring.
§120.1050
On-site reviews and examinations.
§120.1051
Frequency of on-site reviews and examinations.
§120.1055
Review and examination results.
§120.1060
Confidentiality of Reports, Risk Ratings and related Confidential Information.
§120.1070
Lender oversight fees.

Enforcement Actions

§120.1400
Grounds for enforcement actions—SBA Lenders.
§120.1425
Grounds for enforcement actions—Intermediaries participating in the Microloan Program and NTAPs.
§120.1500
Types of enforcement actions—SBA Lenders.
§120.1510
Other Regulated SBLCs.
§120.1511
Certification and other reporting and notification requirements for Other Regulated SBLCs.
§120.1540
Types of enforcement actions—Intermediaries participating in the Microloan Program and NTAPs.
§120.1600
General procedures for enforcement actions against SBA Lenders, SBA Supervised Lenders, Other Regulated SBLCs, Management Officials, Other Persons, Intermediaries, and NTAPs.
rule

Subpart J—ESTABLISHMENT OF SBA SECONDARY MARKET GUARANTEE PROGRAM FOR FIRST LIEN POSITION 504 LOAN POOLS

§120.1700
Definitions used in subpart J.
§120.1701
Program purpose.
§120.1702
Program fee.
§120.1703
Qualifications to be a Pool Originator.
§120.1704
Pool Loans eligible for Pooling.
§120.1705
Pool formation requirements.
§120.1706
Pool Originator's retained interest in Pool.
§120.1707
Seller's retained Loan Interest.
§120.1708
Pool Certificates.
§120.1709
Transfers of Pool Certificates.
§120.1710
Central servicing of the Program.
§120.1711
Suspension or termination of Program participation privileges.
§120.1712
Seller responsibilities with respect to Seller's Pool Loan.
§120.1713
Seller's Pool Loan origination.
§120.1714
Seller's Pool Loan servicing.
§120.1715
Seller's Pool Loan liquidation.
§120.1716
Required SBA approval of servicing actions.
§120.1717
Seller's Pool Loan deferments.
§120.1718
SBA's right to assume Seller's responsibilities.
§120.1719
SBA's right to recover from Seller.
§120.1720
SBA's right to review Pool Loan documents.
§120.1721
SBA's right to investigate.
§120.1722
SBA's offset rights.
§120.1723
Pool Loan receivables received by Seller.
§120.1724
Servicing and liquidation expenses.
§120.1725
No Program Preference by Seller or Pool Originator.
§120.1726
Pool Certificates a Seller cannot purchase.
rule

Subpart K—ESTABLISHMENT OF AN SBA DIRECT LOAN PROGRAM FOR SYSTEMICALLY IMPORTANT SECONDARY MARKET BROKER-DEALERS (SISMBD LOAN PROGRAM)

§120.1800
Definitions used in subpart K.
§120.1801
Program purpose.
§120.1802
How does a broker-dealer participate in the SISMBD Loan Program?
§120.1810
What is a Systemically Important SBA Secondary Market Broker-Dealer (SISMBD)?
§120.1820
What are the basic eligibility requirements for SBA designation as a Systemically Important Secondary Market Broker-Dealer?
§120.1821
What is the process to obtain designation as a Systemically Important Secondary Market Broker-Dealer?
§120.1822
What is the process to apply for an SISMBD Loan?
§120.1823
Creditworthiness.
§120.1824
How will an SISMBD receive notice of an approval or denial of a loan or request for an advance under an SISMBD Loan?
§120.1825
May an SISMBD request reconsideration after denial?
§120.1830
What are the terms and conditions of an SBA loan to an SISMBD?
§120.1831
Is there a limit to the number of SISMBD Loans or advances that an SISMBD may request from SBA?
§120.1832
What is the minimum and maximum SISMBD Loan advance amount?
§120.1833
May an SISMBD request an increase in the loan amount?
§120.1834
What fees are associated with an SISMBD Loan?
§120.1840
What are the allowable uses of proceeds of an SISMBD Loan?
§120.1850
Will the Collateral be held by SBA?
§120.1860
How will the SISMBD Loan be disbursed?
§120.1870
How does the SISMBD provide funds for the Premium?
§120.1880
How will the loan be repaid?
§120.1881
How are payments on the Collateral allocated between the SISMBD borrower and repayment of the SISMBD Loan?
§120.1882
What happens if funds to make required loan payments are not generated from the Collateral?
§120.1890
What is the maturity on a SISMBD Loan from SBA?
§120.1891
What happens if an SISMBD is ineligible to receive an SISMBD Loan or an advance?
§120.1892
What happens if an SISMBD does not use SISMBD Loan funds for a statutorily mandated purpose?
§120.1893
Data collections and reporting.
§120.1900
When does the Secondary Market Lending Authority Program end?


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