Greetings!

As we celebrate Independence Day, we're reminded that freedom is a precious thing – and that the freedom to start a business includes support from lenders offering SBA loans.

In last month’s article (link below), we looked at the careful balance lenders must strike when considering principal compromise in workout situations. This month, we continue focusing on helping lenders navigate change with practical insights and experienced SBA guidance.



Enjoy! And happy 4^th of July to you.

SBA 7(a) Quarterly Connect Calls 2026 dates and links: July 14^th, Oct 20th

SBA 504 Quarterly Connect Calls 2026 dates and links: Sept 8^th, Dec 8^th

SBA Lender Connect Calls 2026 dates and links: Aug 12^th, Nov 10^th

SBA Policy Notice 5000-879058: Coordination of 7(a) and 504 for Maximum Loan Limits. Pub 5/18/2026 Efft 7/1/2026

SBA Policy Notice 5000-879464: Prior Loss Rule: Non-Controlling Ownership Update Efft 6/1/2026

FTA Release Notes: Modernized 1502 Reporting 3.0 Efft 6/18/2026

OIG Report: SBA’s Handling of Disaster Assistance Loan RE Foreclosures. Efft 6/23/2026

SBA 7(a) and 504 Lender Report Efft 6/30/2026

SBA Franchise Directory Efft 7/1/2026



Principal compromise is a viable option when an SBA 7(a) loan runs into trouble, and the only other option is SBA loan liquidation.

It’s helpful for the business owner, because it allows them to keep on keeping on.

But there are some significant risks and potential “gotchas” for the Lender, especially when navigating SBA SOP 50 57 guidance. Let’s take a look.

The hard economic reality right now is that small business bankruptcies are on the rise.

So let’s look at what you can do to prepare your SBA Lending team to protect the guaranty, control costs, and maintain SBA compliance while meeting evolving SBA lender requirements. As Benjamin Franklin said so long ago, an ounce of prevention is worth a pound of cure.

As always, the lending landscape continues to evolve, and we could probably say that every month! But one significant aspect of that evolution is how artificial intelligence is changing the small business landscape, and what that may mean for underwriting, portfolio management, and borrower conversations.

From all of us at LRM Lender Consultants, thank you for reading. We wish you a safe and happy Fourth of July.

If you have questions or want to learn more, give us a call at 877.576.0819, or send us a quick message through our website here.

Your Team at LRM Lender Consultants,