Regulatory Alerts2017-10-30 | I-17-03I-17-03 — SBA Advance Loan Commitment
The Washington State Department of Financial Institutions issued Interpretive Letter I-17-03 to clarify the regulatory treatment of Small Business Administration 504 program loans for state-chartered credit unions. The Division determined that while the first mortgage portion of an SBA 504 loan is not exempt from being classified as a member business loan, it is exempt from specific collateral and security requirements if an SBA advance commitment for the second mortgage debenture exists prior to origination. Additionally, the letter confirms that SBA 7(a) guaranteed loans are exempt from these collateral requirements when the guarantee or advance commitment is in place.
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