Regulation

§ 120.191

13 CFR Ch. I (1–1–09 Edition)

§ 120.191 The contents of a business
loan application.
For most business loans, SBA requires that an application for a business loan contain, among other things,
a description of the history and nature
of the business, the amount and purpose of the loan, the collateral offered
for the loan, current financial statements, historical financial statements
(or tax returns if appropriate) for the
past three years, IRS tax verification,
and a business plan, when applicable.
Personal histories and financial statements will be required from principals
of the applicant (and the Operating
Company, if applicable).
§ 120.192

Approval or denial.

Applicants receive notice of approval
or denial by the Lender, CDC, Intermediary, or SBA, as appropriate. Notice of denial will include the reasons.
If a loan is approved, an Authorization
will be issued.
§ 120.193

COMPUTERIZED SBA FORMS
Use of computer forms.

Any Applicant or Participant may
use computer generated SBA application forms, closing forms, and other
forms designated by SBA if the forms
are exact reproductions of SBA forms.
yshivers on PROD1PC62 with CFR

§ 120.195

Disclosure of fees.

An Applicant for a business loan
must identify to SBA the name of each
Agent as defined in part 103 of this
chapter that helped the applicant obtain the loan, describing the services
performed, and disclosing the amount
of each fee paid or to be paid by the applicant to the Agent in conjunction
with the performance of those services.
§ 120.197 Notifying SBA’s Office of Inspector General of suspected fraud.
Lenders, CDCs, Borrowers, and others
must notify the SBA Office of Inspector General of any information which
indicates that fraud may have occurred
in connection with a 7(a) or 504 loan.
Send the notification to the Assistant
Inspector General for Investigations,
Office of Inspector General, U.S. Small
Business
Administration,
409
3rd
Street, SW., Washington, DC 20416.
[72 FR 18360, Apr. 12, 2007]

Reconsideration after denial.

An applicant or recipient of a business loan may request reconsideration
of a denied loan or loan modification
request within 6 months of denial. Applicants denied due to a size determination can appeal that determination under part 121 of this chapter. All
others must be submitted to the office
that denied the original request. To
prevail, the applicant must demonstrate that it has overcome all legitimate reasons for denial. Six months
after denial, a new application is required. If the reconsideration is denied,
a second and final reconsideration may
be considered by the Director, Office of
Financial Assistance (D/FA), whose decision is final.

§ 120.194

REPORTING

Subpart B—Policies Specific to
7(a) Loans
BONDING REQUIREMENTS
§ 120.200 What bonding requirements
exist during construction?
On 7(a) loans which finance construction, the Borrower must supply a 100
percent payment and performance bond
and builder’s risk insurance, unless
waived by SBA.
LIMITATIONS ON USE OF PROCEEDS
§ 120.201 Refinancing unsecured
undersecured loans.

A Borrower may not use 7(a) loan
proceeds to pay any creditor in a position to sustain a loss causing a shift to
SBA of all or part of a potential loss
from an existing debt.
§ 120.202 Restrictions on
changes in ownership.

loans

13:34 Feb 10, 2009

Jkt 217042

PO 00000

Frm 00248

Fmt 8010

for

A Borrower may not use 7(a) loan
proceeds to purchase a portion of a
business or a portion of another owner’s interest. One or more current owners may use loan proceeds to purchase
the entire interest of another current

238

VerDate Nov<24>2008

or

Sfmt 8010

Y:\SGML\217042.XXX

217042