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Home Source documents Extension of Previous Guidance on Acceptable Signatures for Applications and Loan Documents (Control No. 5000-808946)

Extension of Previous Guidance on Acceptable Signatures for Applications and Loan Documents (Control No. 5000-808946)

Summary

This SBA Procedural Notice, Control No. 5000-808946, effective April 27, 2021, extends through July 31, 2021 the guidance in Procedural Notice 5000-20089, which was scheduled to expire on April 30, 2021. SBA cites the continued uncertainty of the COVID-19 pandemic. SOP 50 10 already permits lenders to use electronic signatures on SBA forms for 7(a) and 504 loans if they meet the standards in its Appendix 10. Where electronic signatures are not feasible, SBA Lenders may accept scanned copies of 7(a) and 504 SBA forms and other loan documents carrying all required signatures, including the applicant's.

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Full text

                          SBA Procedural Notice
TO: All SBA Employees and SBA Lenders                                                     CONTROL NO.: 5000-808946

SUBJECT: Extension of Previous Guidance on                                                EFFECTIVE: April 27, 2021
Acceptable Signatures for Applications and Loan
Documents in the 7(a) and 504 Business Loan
Programs Through July 31, 2021



The purpose of this Notice is to further extend the guidance set forth in SBA Procedural
Notice 5000-20089, “Extension of Previous Guidance on Acceptable Signatures for
Applications and Loan Documents in the 7(a) and 504 Business Loan Programs Through
April 30, 2021”, effective January 28, 2021. The guidance in SBA Procedural Notice 5000-
20089 is scheduled to expire on April 30, 2021, and SBA is extending it through July 31,
2021, due to the continued uncertainty of the ongoing Coronavirus Disease 2019 (COVID-
19) pandemic.

7(a) and 504 Business Loans
As set forth in Standard Operating Procedure (SOP) 50 10, SBA currently permits SBA
Lenders (7(a) Lenders and Certified Development Companies) to use electronic signatures on
SBA forms and other documents requiring signatures in connection with 7(a) and 504
business loans provided they comply with the standards outlined in Appendix 10 to SOP 50
10 6, titled “Electronic Signatures”.1 In SBA Procedural Notices 5000-20050, 5000-20061,
and 5000-20089, SBA modified the procedures for submitting documents with acceptable
signatures where electronic signatures were not feasible. With this Notice, SBA is extending
these modified procedures for submitting acceptable signatures as follows:
    A. Application Documents, Note, Guaranty, and Servicing Agent Agreement:
        Effective immediately and until July 31, 2021, where electronic signatures are not
        feasible, all SBA Lenders may accept scanned copies of 7(a) and 504 SBA forms and
        other loan documents with all required signatures, including but not limited to:
             1. The Applicant’s signature (including the signature(s) of any Co-Applicant,
                Operating Company, owner(s) of the Applicant, and key employee(s), if

1
 Electronic signatures cannot be used on any document if the recording office requires wet signatures. See, Section
B. below.
PAGE 1 of 3                                                                                        EXPIRES: 4/1/22
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
               required by SBA Loan Program Requirements) on application documents
               (including SBA Form 1919, Borrower Information Form (for use with all 7(a)
               Programs), SBA Form 1244, Application for Section 504 Loans, and SBA
               Form 159, Fee Disclosure and Compensation Agreement);
           2. The Borrower’s signature on the promissory note (SBA Form 147 or the
              Lender’s equivalent form for 7(a) loans and SBA Form 1505 for 504 loans);
           3. The Agent’s signature on SBA Form 159;
           4. The Guarantor’s signature on the guaranty (SBA Form 148/148L or the
              Lender’s equivalent form); and
           5. For 504 loans, the Borrower’s signature on SBA Form 1506, Servicing Agent
              Agreement.

       The scanned copy of the document is acceptable provided that the SBA Lender also
       obtains:

           1. A copy of the individual’s driver’s license or other valid form of identification
              (front and back) at the same time that the scanned copy is submitted; and
           2. A valid original signature on the applicable document within six (6) months of
              the date of the Note.

       If the SBA Lender fails to obtain the required original signature within six (6) months
       of the date of the Note, for 7(a) loans, SBA may deny liability on the guaranty in full
       and, for 504 loans, SBA may pursue a CDC recovery claim under 13 CFR § 120.938
       and/or a claim against the 504 Closing Attorney.

       For 504 loans, before the Debenture is sold, the CDC must complete an assignment of
       the Note and Guaranty(ies) to SBA when scanned copies of all required signatures
       have been obtained. When the CDC obtains the documents with all valid original
       signatures within six (6) months of the date of the Note, the CDC must assign the
       original signed documents to SBA and submit the original assigned documents to the
       appropriate SBA Servicing Center.

   B. Collateral/Security Documents:

       With respect to collateral/security documents that must be recorded, such as
       mortgages, deeds of trust, security agreements and Third Party Lender Agreements,
       SBA Lenders must comply with the requirements of the applicable local recording
       office with respect to acceptable signatures.

Additional Information
If electronic signatures are not feasible, when obtaining a wet ink signature without in-person
contact, SBA Lenders must take appropriate steps to ensure the proper party has executed the
document.
PAGE 2 of 3                                                                                 EXPIRES: 4/1/22
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
SBA Lenders must retain the required documents in accordance with SOP 50 10.
SBA Lenders are reminded to protect all Personally Identifiable Information (PII) in
accordance with all applicable privacy and other laws and practices.

Questions
Questions concerning this Notice may be directed to the Lender Relations Specialist in the local
SBA Field Office.




Patrick Kelley
Associate Administrator
Office of Capital Access




PAGE 3 of 3                                                                                 EXPIRES: 4/1/22
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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