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SBA Procedural Notice: Extension of Previous Guidance on Acceptable Signatures for Applications and Loan Documents in the 7(a) and 504 Business Loan Programs Through February 1, 2022 (Effective September 29, 2021)

Summary

This SBA Procedural Notice, Control No. 5000-820701, effective September 29, 2021, extends the guidance in Procedural Notice 5000-808946, retroactive to August 1, 2021 and through February 1, 2022. SBA cites the continued uncertainty of the COVID-19 pandemic. It says SBA and lenders are moving toward electronic signature documents to comply with Federal requirements, and therefore SBA does not anticipate any further extensions of this notice. Until February 1, 2022, where electronic signatures are not feasible, SBA Lenders may accept scanned copies of 7(a) and 504 SBA forms and other loan documents with all required signatures.

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Full text

                          SBA Procedural Notice
TO: All SBA Employees and SBA Lenders                                                     CONTROL NO.: 5000-820701

SUBJECT: Extension of Previous Guidance on                                                EFFECTIVE: September 29, 2021
Acceptable Signatures for Applications and Loan
Documents in the 7(a) and 504 Business Loan
Programs Through February 1, 2022



The purpose of this Notice is to further extend the guidance set forth in SBA Procedural
Notice 5000-808946, “Extension of Previous Guidance on Acceptable Signatures for
Applications and Loan Documents in the 7(a) and 504 Business Loan Programs Through July
31, 2021,” effective April 27, 2021. The guidance in SBA Procedural Notice 5000-808946 is
being extended retroactive to August 1, 2021, and through February 1, 2022, 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,
5000-20089 and 5000-808946, 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 August 1, 2021, and until February 1, 2022, SBA along with lenders are
        moving toward electronic signature documents to comply with Federal requirements.
        Therefore, SBA does not anticipate any further extensions of this notice. 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
 Electronic signatures cannot be used on any document if the recording office requires wet signatures. See, Section
B. below.
PAGE 1 of 3                                                                                       EXPIRES: 9/1/22
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
           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
              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.



PAGE 2 of 3                                                                                 EXPIRES: 9/1/22
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
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.
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.




Dianna L. Seaborn
Director
Office of Financial Assistance




PAGE 3 of 3                                                                                 EXPIRES: 9/1/22
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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