The SBA Lender certifies and documents in its credit memorandum that the Applicant cannot obtain some or all of the loan on reasonable terms without SBA assistance from non-government sources, including the Lender itself or the Third Party Lender: that the funds are not available from the liquidity of the Applicant (allowing reasonable funds for 24 months of capital expenses and working capital) or of 20%-or-more owners and their spouses and minor children (allowing reasonable reserves for medical, education and retirement needs), nor from conventional credit, including third-party commitments such as a franchisor support pledge. It names the specific weakness that takes the loan outside conventional policy (term needed, lending limit, collateral shortfall, new business or industry, or other explained factors such as credit history, management experience, leverage or global cash flow) with supporting documents. A credit score shortfall alone, dependence on secondary market sales, or exceeding the legal lending limit may not be the sole reason, and CRA credit or a better collateral position may not be used at all. A loan that meets conventional standards is ineligible, and a weak analysis can lead to decline, denial of guaranty liability or a 504 corrective action.
The graph holds this control, the 0 it maps to, and the evidence behind each claim, over MCP and REST.