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Credit memo example4/22/2024 ![]() ![]() Liquidity of owners, as well as their spouses or minor children, of 20% or more of the business.Some or all the loan amount is not available from any of the following sources:.The SBA requires borrowers to prove that they have not been able to secure financing through conventional means in order to qualify for an SBA 7(a) loan. These elements that every SBA credit memo must include are… Other items may only be applicable to SBA 7(a) loans. Some items are common on all credit memos whether it is for a conventional or SBA loan, like the Business History, Borrower and Guarantor Summary, and Credit History. Key Elements of a Credit Memo:Ī complete credit memo details a comprehensive picture of the borrower’s credit worthiness. Below we highlight some of the most important items to include on SBA credit memos, as well as the most commonly omitted items. Streamlining the loan application process starts with understanding what the SBA is looking for in their credit memo standards. These credit memos are heavily scrutinized by the SBA throughout the approval process or in the event of a borrower default. The SBA has strict criteria for credit memos that are put together for SBA 7(a) loans. Not only can incomplete credit memos lead to frustrations for the borrower, they can in some cases even lead to a repair or denial of the guaranty from the SBA. If any of these elements are missing, the story will be incomplete which can lead to the loan being delayed or denied. Just as any good storyteller does, the lender creating the credit memo must include specific elements that help paint the picture of why the borrower should be approved for a loan. ![]() This story is then evaluated by the bank and the SBA to determine whether the loan will be approved or denied. Credit memos are critical to a loan application as they help tell the story of a borrower, their business and how the loan will be used. ![]()
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