SBA Procedural Notice 5000-875701 - Sunset of SBSS Score for 7(a) Small Loans
Summary
SBA Procedural Notice, Control No. 5000-875701, published January 16, 2026 and effective March 1, 2026, to SBA employees and 7(a) lenders, on the sunset of the SBSS Score for 7(a) Small loans. It announces that SBA is discontinuing use of the FICO Small Business Scoring Service Score (SBSS Score) effective March 1, 2026. From that date, 7(a) Small loan applications will no longer receive an SBSS Score and SBA will no longer screen them using it. The notice sets out what applies in the absence of the SBSS Score.
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Full text
SBA Procedural Notice
TO: All SBA Employees and 7(a) Lenders CONTROL NO.: 5000-875701
SUBJECT: Sunset of SBSS Score for 7(a) Small EFFECTIVE: March 1, 2026
Loans.
PUBLICATION: January 16, 2026
The purpose of this Notice is to announce that SBA is discontinuing use of the FICO® Small
Business Scoring ServiceSM Score (SBSS Score) effective March 1, 2026. Beginning on that
date, 7(a) Small loan applications will no longer receive an SBSS Score and SBA will no longer
screen 7(a) Small loan applications using the SBSS Score. In the absence of SBSS Scores, SBA
is updating the 7(a) Small loan underwriting procedures in SOP 50 10 8.
SBA’s lending criteria requires that Lenders use appropriate and prudent generally acceptable
commercial credit analysis processes and procedures consistent with those used for their
similarly-sized, non-SBA guaranteed commercial loans in accordance with. 13 CFR 120.150.
Lenders may use a business credit scoring model permitted by their primary Federal regulator to
assess the credit history of the 7(a) Small loan applicant if they do so for their similarly-sized,
non-SBA guaranteed commercial loans.
Because SBA is discontinuing the use of SBSS scores for 7(a) Small loan underwriting , SBA is
revising the underwriting requirements for 7(a) Small loan applicants in SOP 50 10 8 to
emphasize generally accepted industry credit analysis processes and procedures, which may
include use of the Lender’s own internal credit scoring models as permitted by their primary
Federal regulator, provided such model does not rely solely on consumer credit scores.
Small Business Lending Company (SBLC), which do not make non-SBA guaranteed loans, and
thus do not have similarly-sized, non-SBA guaranteed commercial loans in their portfolio, may
continue to use credit scoring as before, though they are required to provide their credit scoring
model for review by SBA on an annual basis.
SBA Express loans are not affected by this change, and SBA Lenders may continue to utilize
business scoring models permitted by their primary Federal regulator, as set forth in SBA SOP
50 10 8, Section B, Chapter 2, Paragraph C.2.b.
PAGE 1 of 4 EXPIRES: 3/1/27
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
Federal Recycling Program Printed on Recycled Paper
For this update SBA is revising SOP 50 10 8 by renumbering existing paragraph C.2.a.ii, 7(a)
Small Equity Requirements, as Paragraph C.2.a.iii, and by removing in its entirety Section B,
Chapter 2, Paragraph C.2.a.i., beginning on page 168, and replacing it with the text set out
below. The remainder of Section B, Chapter 2, Paragraph C.2.a. is unchanged. The revised text
is as follows:
2. Underwriting
Note: 7(a) Small Loans may only be increased up to $350,000. If the 7(a) Small loan is
increased above $350,000, it becomes a Standard 7(a) loan and must follow the
requirements in Chapter 1 of this section. SBA Express loans may not exceed $500,000.
a. Underwriting 7(a) Small Loans
i. Lenders must use appropriate, prudent, and generally accepted industry credit
analysis processes and procedures consistent with those used for the
Lender’s similarly-sized, non-SBA guaranteed commercial loans. These
policies and procedures may include credit scoring models that are permitted
by the Lender’s primary Federal regulator.
ii. In addition to summarizing the business, ownership, and loan request, the
Lender’s credit memorandum must state why credit is not available
elsewhere, demonstrate reasonable assurance of repayment, and include the
following:
a) Analysis of the credit history of the Applicant (and Operating Company,
if applicable), its Associates, and guarantors;
b) Analysis of the Applicant’s (and Operating Company, if applicable),
debt service coverage, and two most recent months of commercial bank
activity or statements, and projected earnings (if applicable);
i) Debt service coverage is measured by dividing the operating cash flow
(OCF) by the debt service (DS).
(a) Operating cash flow (OCF) is defined as earnings before interest,
taxes, depreciation, and amortization (EBITDA). Lenders may
make additions and subtractions to OCF pursuant to the rules
found in Section B, Ch. 1: Standard 7(a) Loans.
(b) Debt service (DS) is defined as the future required principal and
interest payments on all business debt, inclusive of new SBA loan
proceeds.
(c) For 7(a) Small Loans, the Applicant’s debt service coverage ratio
must be equal to or greater than 1.1:1 on a historical and/or
projected cash flow basis.
PAGE 2 of 4 EXPIRES: 3/1/27
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
Federal Recycling Program Printed on Recycled Paper
ii) Insurance – Lender must address whether life insurance or other
insurance (i.e., insurance other than hazard insurance) will be required.
For insurance other than hazard insurance, Lender may follow the
same written policies and procedures it uses for its similarly-sized non-
SBA guaranteed commercial loans. Hazard insurance is required in
accordance with Section A, Ch. 5, Para. C.1.;
iii) Lender must address other specifics relating to the loan as applicable,
including:
(a) A description of any proposed collateral and estimated value;
(b) For loans greater than $50,000, when 50 percent or more of the
loan proceeds will be used for working capital, Lender must
explain in its credit memorandum why this level of working capital
is necessary and appropriate for the subject business;
(c) The terms of any seller financing and standby agreements;
(d) Discussion of any liens, judgments, or pending litigation, including
divorce proceedings;
(e) If the application involves a franchise (as defined by FTC), the
Lender must review any credit information provided, such as the
number of failed franchisees and cash flow projections provided by
the franchisor. Lender must review any management agreement
(unless the management agreement is part of the franchise
disclosure documents for a brand listed on the Franchise Directory)
to determine if it results in an ineligible passive company;
(f) Any debt refinancing, including justification and original purpose
(copies of all notes to be refinanced must be submitted with any
loan submitted to the LGPC).
(g) The effect any affiliates may have on the ultimate repayment
ability of the Applicant.
c) Lenders may use a business credit scoring model permitted by their
primary Federal regulator to assess the credit history of the applicant if
they do so for their similarly-sized, non-SBA guaranteed commercial
loans, provided such model does not rely solely on consumer credit
scores.
i) The business credit scoring model may only be used in addition to the
Lender’s appropriate, prudent, and generally accepted industry credit
analysis and procedures. If used, the business credit scoring results
must be documented in each loan file and included in E-Tran with
submission.
PAGE 3 of 4 EXPIRES: 3/1/27
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
Federal Recycling Program Printed on Recycled Paper
ii) Although SBLCs do not make non-SBA guaranteed loans, SBA has
determined they may use credit scoring. SBLCs are required to
provide the credit scoring model for review by SBA on an annual
basis.
SBA SOP 50 10 8, Appendix 2, Acronyms, page 400, the reference to “SBSS Small Business
Scoring ServiceSM Score” is deleted from the list of acronyms in the SOP.
Loan applications approved in E-Tran prior to 11:59 PM Eastern on February 28, 2026, may
continue to use the SBSS score. All 7(a) Small loans approved on or after March 1, 2026, must
comply with the 7(a) Small Loan underwriting requirements stated above.
Questions
Lenders can submit questions on the sunset of the SBSS Score to 7aQuestions@sba.gov.
Thomas Kimsey
Associate Administrator
Office of Capital Access
PAGE 4 of 4 EXPIRES: 3/1/27
SBA Form 1353.3 (4-93) MS Word Edition; previous editions obsolete
Must be accompanied by SBA Form 58
Federal Recycling Program Printed on Recycled Paper
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