On Aug. 14, 2026, the Small Business Administration (SBA) published standard operating procedure (SOP) 50 10 8.1, Lender and Development Company Loan Programs, effective Oct. 1, 2026. The new SOP replaces SOP 50 10 8 and governs loan origination policies and procedures for both the 7(a) and 504 programs.

For SBA lenders, the release creates an important implementation window to evaluate how the updated requirements affect underwriting, eligibility reviews, documentation and internal procedures.

Key Areas of Focus

Repayment analysis remains central. SBA lending continues to be fundamentally cash-flow based. Under the new SOP, lenders are expected to analyze applications in a commercially reasonable manner consistent with prudent lending standards, with business cash flow serving as the primary source of repayment. 

Change-of-ownership transaction requirements are now detailed in Appendix 15.  The four change of ownership categories are: initial acquisition, business expansion, owner buyout (existing and partial change), and employee stock ownership plan (ESOP) and cooperative. Business expansion and initial acquisition transactions, where the purchase price is equal to or greater than $3 million, must have a quality of earnings (QofE). This QofE must include a cash proof covering both the trailing 12 months and the last two fiscal years. The debt service coverage ratio (DSCR) is now transaction-dependent. The SBA lender must use the earnings from the QofE in the DSCR determination and retain the QofE report in the loan file. 

7(a) Small Loan Underwriting requirements have also changed. The prior small business scoring service (SBSS) approach has changed. The SBA lender must now perform a credit analysis that includes a repayment analysis with two most recent months of bank statements. There are other changes in the small loan program in SOP 8.1. 

Manufacturers’ Access to Revolving Credit (MARC) loan requirements are detailed in Chapter 3 of the new SOP. This new program is aimed at manufacturers and was initially found in the Procedural Notice 5000-870260. 

Preparing for Oct. 1

Before the new SOP takes effect, lenders should review and update their underwriting procedures, credit memoranda, eligibility processes, checklists and training materials to ensure they align with SOP 50 10 8.1.

As Oct. 1 approaches, a disciplined review of policies and procedures can help lenders navigate SOP 50 10 8.1 with greater clarity and confidence. Rely on Doeren Mayhew’s pros to identify the operational and credit administration impacts of these changes, including updates affecting change of ownership transactions, MARC loans, small loans, DSCR requirements, debt refinancing, and other areas incorporated into the revised SOP.  Our approach is tailored to your institution’s needs, from targeted compliance reviews to transaction level guidance.