Hello Andrew,

Have you documented your internal equity injection requirements for 2024?

As we all know the SBA SOP changes last year created new responsibilities for lenders under the "Do What You Do" concept, which now also extends to equity injection verification.

Each lender, if they have not already, must define their own criteria for suitable sourcing and verification of equity injection for SBA loans financed through their institution.

Our latest article provides best practices for developing an internal equity injection policy for SBA lending in 2024. We walk through the minimum recommended steps Windsor performs for each client, and include a free 6 step questionnaire lenders may complete to create a sample internal equity injection policy if equity injection documentation is not explicitly included in your current credit policy. 

Access this resource now at: https://www.windsoradvantage.com/news/sba-underwriting-equity-injection-requirements

Summary of Major Changes for Equity Injection from SOP 50 10 6 to SOP 50 10 7.1:

Best Practices: How to Define an Internal Equity Injection Policy for SBA Loan Underwriting

Walk through the questionnaire in our latest article to make sure you are thinking through scenarios that your institution will/won’t accept for equity verification if you do not have a written policy on it.

We recommend regularly reviewing this policy with your SBA underwriting team, and as new versions of the SOP are released.

Many borrowers and lenders found SBA’s old equity verification requirements to be too documentation heavy, intrusive, and unnecessary. Following your institution’s internal policies and procedures for documenting and verifying equity injection may provide a great opportunity to streamline the equity verification process.

If your institution’s internal policies and procedures require less than what was required under previous SOP’s, the equity verification process would be less burdensome for borrowers in an already burdensome and documentation-heavy SBA closing process.

Should your institution need further assistance creating internal standards for SBA Loan Underwriting and Equity Injection, our Underwriting team is here to help. Please reach out regarding options for utilizing Windsor Advantage as your dedicated SBA lender service provider by contacting us at https://www.windsoradvantage.com/contact

Further Reading on 2024 Equity Injection Requirements for SBA Loan Underwriting, from the Windsor Advantage SBA Blog: https://www.windsoradvantage.com/news/sba-underwriting-equity-injection-requirements