SBA Issues Checklist to Guide Lenders Through Change of Ownership Approvals Where Goodwill exceeds $250K.
When the SOP 5010 was revised March 1, 2009, the SBA revised the change of ownership provisions to preclude financing more than $250,000 (or 50% of the sales price) in goodwill of a business. Concurrently with the SOP revision, SBA Notice 5000-1096 was issued which provided that lenders seeking approval for a change of ownership transaction could submit the application directly to the SBA for consideration. Many lenders were skeptical that they would receive approval of any transaction exceeding the $250,000 goodwill limit. Yet, at the recent NAGGL conference earlier this month in May, the SBA announced that they had not denied any requests to date. The SBA has now issued a checklist of items a lender should include in its approval request. It also released a case study of a asset sale transaction where goodwill exceeded $250,000 which was approved by the SBA. Hopefully, these two releases will provide lenders with better guidance in preparing their requests for approval to the SBA. Click here for the SBA Change in Ownership Checklist, and here for the SBA Change in Ownership Case Study. Alison W. Rind and Arnold D. Spevack, principals in the firm's Real Estate and Commercial Lending practice groups, are on hand to provide any additional information you may need.