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New SBA SOP Eases Loan Process for Franchisees

Protect Law Group is committed to resolving your SBA loan default problems. Our experienced attorneys can help you through the SBA loan default process with an SBA offer in compromise, administrative wage garnishment defense, or other SBA loan forgiveness processes.

The SBA historically has been a major cog in the lending to franchises. In the past the SBA required franchisees to qualify as a small business. Therefore, the franchisee could not be “affiliated” with the franchisor. The result was form over substance contracts that established no prohibited affiliation. Moreover, SBA offices were inconsistent in how each respective office interpreted the rule.

The SBA issued a new Standard Operating Procedure (SOP), 50 10 5(I), that provides a new process to apply a consistent rule of establishing non-affiliation. Instead, any presumption of affiliation can be defeated by offering a standardized SBA addendum to their franchise agreements.

However, the new SOP notes that “the applicant franchisee and the franchise system must meet all SBA eligibility requirements.” As such, individual SBA offices may continue to apply additional standards or requirements.

If you are facing an SBA loan default, contact us at 1-888-756-9969 for a FREE initial consultation.

We are here to help you with your SBA loan problems.

If you owe more than $30,000, call our experienced attorneys at (888) 303-6975 anytime for a Free Case Evaluation