For 7(a) Small loans the Lender uses prudent, generally accepted credit analysis consistent with its comparable non-SBA commercial loans, which may include a regulator-permitted scoring model that combines Applicant and guarantors but does not rest solely on consumer scores (score and approval range recorded; SBLC models may be requested by SBA). Its credit memorandum states why credit is not available elsewhere and records: the credit history of the Applicant (and OC), Associates and guarantors from personal credit reports; repayment ability as debt service coverage of at least 1.10 (outside changes of ownership), computed from EBITDA over all business debt service including the new loan, using a year-end statement received within 120 days of year end, a year-end plus interim within 120 days, or 12-month projections showing 1.10 within a year; and review of two months of commercial bank statements on the primary operating account to confirm all debts are included (not needed for a business not yet operating), retained in the file. Where coverage falls short the loan is processed as Standard 7(a) or SBA Express. It also addresses insurance, collateral and value, working capital above half of proceeds, seller and standby debt, liens and litigation, franchise and management agreements, refinancing and affiliates, and the equity required.
The graph holds this control, the 0 it maps to, and the evidence behind each claim, over MCP and REST.