Pinecrest Veterinary Clinic Inc · Your Firm

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Ready 20

Need attention 0

Missing 0

Need a person 5

Rules used

SOP 50 10 8 (as amended)

Why this version

M1-VER-001 · SOP 50 10 8 (eff. 2025-06-01); SBA SOP 50 10 versions page Rule status: VERIFIED

The rule, as our rulebook reads it: Loan files with an application received by SBA from 2025-06-01 through 2026-09-30 are governed by SOP 50 10 8 as amended by later notices (S-040; a file with no received date, or one that straddles 2026-10-01, goes to a person)

Appended workbook

The credit analysis, rebuilt as live formulas.

We rebuild the spreads, add-backs, debt service coverage, global cash flow, projections against history, a stress test, the equity injection trace, the disbursement tie-out and the dates from the documents in the file. Every number is a formula, and every input carries the file, sheet and source line it came from.

Sheets in the workbook:

Inputs
Verify
Thresholds
Spreads
Add-backs
DSCR
Global Cash Flow
Projections vs Historical
Stress
Equity Injection Trace
Disbursement Tie-out
Dates
Findings
Sources

Verification table, from the demonstration file's workbook. Threshold entries cite their source and status; the stress test is a practice, not an SBA requirement.

How each workbook number is verified to its source cell
Sheet	Cell	Output	Formula	Depends on Inputs (key · locator)
Spreads	B4	Spreads Gross profit 2023	=B2-B3	fin.2023.revenue · Historical_Financials.xlsx · sheet Income Statement · cell B4 \| fin.2023.cogs · Historical_Financials.xlsx · sheet Income Statement · cell B5
Spreads	B6	Spreads EBITDA 2023	=B4-B5	fin.2023.revenue · Historical_Financials.xlsx · sheet Income Statement · cell B4 \| fin.2023.cogs · Historical_Financials.xlsx · sheet Income Statement · cell B5 \| fin.2023.opex · Historical_Financials.xlsx · sheet Income Statement · cell B6
Spreads	B9	Spreads Net income (computed) 2023	=B6-B7-B8	fin.2023.revenue · Historical_Financials.xlsx · sheet Income Statement · cell B4 \| fin.2023.cogs · Historical_Financials.xlsx · sheet Income Statement · cell B5 \| fin.2023.opex · Historical_Financials.xlsx · sheet Income Statement · cell B6 \| fin.2023.interest · Historical_Financials.xlsx · sheet Income Statement · cell B7 \| fin.2023.depreciation · Historical_Financials.xlsx · sheet Income Statement · cell B8
Spreads	C4	Spreads Gross profit 2024	=C2-C3	fin.2024.revenue · Historical_Financials.xlsx · sheet Income Statement · cell C4 \| fin.2024.cogs · Historical_Financials.xlsx · sheet Income Statement · cell C5
Spreads	C6	Spreads EBITDA 2024	=C4-C5	fin.2024.revenue · Historical_Financials.xlsx · sheet Income Statement · cell C4 \| fin.2024.cogs · Historical_Financials.xlsx · sheet Income Statement · cell C5 \| fin.2024.opex · Historical_Financials.xlsx · sheet Income Statement · cell C6
Spreads	C9	Spreads Net income (computed) 2024	=C6-C7-C8	fin.2024.revenue · Historical_Financials.xlsx · sheet Income Statement · cell C4 \| fin.2024.cogs · Historical_Financials.xlsx · sheet Income Statement · cell C5 \| fin.2024.opex · Historical_Financials.xlsx · sheet Income Statement · cell C6 \| fin.2024.interest · Historical_Financials.xlsx · sheet Income Statement · cell C7 \| fin.2024.depreciation · Historical_Financials.xlsx · sheet Income Statement · cell C8
Spreads	D4	Spreads Gross profit 2025	=D2-D3	fin.2025.revenue · Historical_Financials.xlsx · sheet Income Statement · cell D4 \| fin.2025.cogs · Historical_Financials.xlsx · sheet Income Statement · cell D5
Spreads	D6	Spreads EBITDA 2025	=D4-D5	fin.2025.revenue · Historical_Financials.xlsx · sheet Income Statement · cell D4 \| fin.2025.cogs · Historical_Financials.xlsx · sheet Income Statement · cell D5 \| fin.2025.opex · Historical_Financials.xlsx · sheet Income Statement · cell D6

Findings, worst first

25 findings, every one produced by the review engine on this file (engine output pinecrest-vet, digest 260735074a15). 9 rules in scope could not be tested on born-digital documents in this version and 51 do not apply to this file; neither is shown as a finding.

A credit officer must judge repayment ability

Status: Needs a person

What we checked

A lender credit memorandum covering repayment ability is in the file

What we found

Credit memo present. Whether it covers every SOP-required element is a judgment, not a mechanical check. The appended workbook gives the DSCR, stress and add-back tests to support that review.

Where in the file

Credit_Memo_Pinecrest.docx

Why it matters

Repayment ability is the lender's credit decision.

Why believe this

23 independent sources name this failure (D-022). SBA can: deny the guaranty · call the payment improper

OIG 11-16 (OIG): bank did not adequately assess repayment ability (Huntington Learning Center loans)
OIG 12-18 (OIG): detailed repayment analysis needed on high-dollar early defaults
OIG 13-16R (OIG): inadequate assurance of repayment ability
OIG 14-09 (OIG): unverified repayment ability
OIG 16-19 (OIG): did not assess repayment ability and size

If it cannot be fixed: At purchase, put the analysis in front of SBA anyway: rebuild the memo from documents dated before approval, show the ratio and the basis, and propose a repair sized to any shortfall. Do not backdate; a late memo is read as a late memo.

Rule status

13 CFR 120.150 (applicant must be creditworthy; loans so sound as to reasonably assure repayment; prudent generally accepted commercial credit analysis consistent with the lender's similarly-sized non-SBA loans); credit-memorandum element list is SOP 50 10 8 §A Ch.4 (unread); LGPC checklist Tab 2 — rule status VERIFIED

How to fix it

A credit officer reads the memo against the SOP's required elements and signs off.
Use the workbook's DSCR, Stress and Add-backs sheets as the tie-out.

What does this mean?

The portal checks that the repayment analysis is there. A person checks that it is good.

The rule we checked against

M1-CRED-001 · 13 CFR 120.150 (applicant must be creditworthy; loans so sound as to reasonably assure repayment; prudent generally accepted commercial credit analysis consistent with the lender's similarly-sized non-SBA loans); credit-memorandum element list is SOP 50 10 8 §A Ch.4 (unread); LGPC checklist Tab 2 Rule status: VERIFIED

The rule, as our rulebook reads it: Lender must analyze and document that the applicant is creditworthy and the loan is so sound as to reasonably assure repayment, using appropriate and prudent generally acceptable commercial credit analysis consistent with its similarly-sized non-SBA loans, considering credit history, earnings/cash flow, equity and collateral as applicable (13 CFR 120.150). The specific credit-memorandum elements are SOP 50 10 8 §A Ch.4 text not yet read

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-CRED-001.

No Associate may be "currently incarcerated, serving a sentence of imprisonment imposed upon adjudication of g

Status: Needs a person

What we checked

Whether the file holds: SBA Form 1919

What we found

Present: SBA Form 1919. Presence only; content not tested in v0. Not checked in v0: court/indictment records if disclosed.

Where in the file

SBA_Form_1919_Brightwater.docx; SBA_Form_1919_Linwood.docx; SBA_Form_1919_Pinecrest_Inc.docx

Why it matters

No Associate may be "currently incarcerated, serving a sentence of imprisonment imposed upon adjudication of guilty, or ... under indictment for a felony or any crime involving or relating to financial misconduct or a false statement" (13 CFR 120.110(n) as amended by the 2024-04-30 final rule, eff. 2024-05-30; verbatim from the Federal Register). The final rule removed the prior probation/parole restriction; Form 912 is not referenced. Form 1919 disclosures must be complete and consistent with this ground

Why believe this

4 corpus entries name this failure.

D-012 (deficiencies): Criminal history, incarceration, indictment or probation of an associate not screened or followed up (MULTI-SOURCE, 5 sources)
OC-018 (OCRM-PARRIS-CORPUS): SBA Form 1919 incomplete or inaccurate
CA-062 (CREDIT-ANALYSIS-STANDARDS): Lender's memo is scanned by reviewers: life insurance, IRS transcript verification and certification, complete collateral schedules, use of proceeds, refinanced notes, de…
PR-012 (PURCHASE-REPAIR-DENIAL-CORPUS): Key manager or owner criminal history not screened

Rule status

13 CFR 120.110(n) as amended by 89 FR 34094 (2024-04-30; eff. 2024-05-30; verbatim read on federalregister.gov): incarcerated, serving a sentence of imprisonment, or under indictment for a felony or a crime involving financial misconduct or a false statement; probation/parole ground removed; Form 1919 character questions — rule status VERIFIED

How to fix it

A person reviews the content against the rule.

What does this mean?

Each owner answers questions about criminal history on Form 1919. A person reads the answers; the portal only checks that the forms are there.

The rule we checked against

M1-ELIG-017 · 13 CFR 120.110(n) as amended by 89 FR 34094 (2024-04-30; eff. 2024-05-30; verbatim read on federalregister.gov): incarcerated, serving a sentence of imprisonment, or under indictment for a felony or a crime involving financial misconduct or a false statement; probation/parole ground removed; Form 1919 character questions Rule status: VERIFIED

The rule, as our rulebook reads it: No Associate may be "currently incarcerated, serving a sentence of imprisonment imposed upon adjudication of guilty, or ... under indictment for a felony or any crime involving or relating to financial misconduct or a false statement" (13 CFR 120.110(n) as amended by the 2024-04-30 final rule, eff. 2024-05-30; verbatim from the Federal Register). The final rule removed the prior probation/parole restriction; Form 912 is not referenced. Form 1919 disclosures must be complete and consistent with this ground

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-ELIG-017.

Proceeds may not be used for: payments, distributions or loans to Associates

Status: Needs a person

What we checked

Whether the file holds: settlement sheet (Form 1050), credit memo

What we found

Present: settlement sheet (Form 1050), credit memo. Presence only; content not tested in v0. Not checked in v0: use-of-proceeds table.

Where in the file

SBA_Form_1050_Settlement_Sheet.docx; Credit_Memo_Pinecrest.docx

Why it matters

Proceeds may not be used for: payments, distributions or loans to Associates (except ordinary compensation for services or a change of ownership under 120.202); refinancing debt owed to an SBIC or NMVCC; floor plan or other revolving credit except CAPLines; real or personal property held primarily for sale, lease or investment (except EPC or a small contractor under 120.310); past-due Federal, state or local payroll, sales or other trust-fund taxes; any purpose that does not benefit the small business; or any use restricted by 120.201 (13 CFR 120.130). The SOP's refinancing limits (MCA/factoring, same-lender debt) are SOP text not yet read (see M1-V81-014)

Why believe this

5 corpus entries name this failure.

D-019 (deficiencies): Lender treats an SBA-ineligible use of proceeds as acceptable at origination (personal use, ineligible activity seen at site) (SINGLE-SOURCE, 1 sources)
CA-010 (CREDIT-ANALYSIS-STANDARDS): Business cash flow of the applicant is the primary source of repayment, not liquidation of collateral.
AE-016 (CREDIT-ANALYSIS-STANDARDS): Repayment ability not adequately supported by cash flow; pre-existing tax lien not addressed; business-failure explanation unsupported
OC-023 (OCRM-PARRIS-CORPUS): Credit memo lacks SOP-required elements
OIG 19-22 (OIG-CORPUS): Material origination and closing problems: business valuations, affiliates, equity injection, repayment ability (ORIGINATION/CLOSING)

Rule status

13 CFR 120.130(a)-(g) (restrictions on uses of proceeds); 13 CFR 120.201 (7(a)-specific restrictions, not fetched); SOP 50 10 8 §A Ch.3 ¶B refinancing/MCA detail (unread) — rule status VERIFIED

How to fix it

A person reviews the content against the rule.

What does this mean?

SBA limits what the loan money can be used for. A person reads the use of proceeds against those limits.

The rule we checked against

M1-USE-001 · 13 CFR 120.130(a)-(g) (restrictions on uses of proceeds); 13 CFR 120.201 (7(a)-specific restrictions, not fetched); SOP 50 10 8 §A Ch.3 ¶B refinancing/MCA detail (unread) Rule status: VERIFIED

The rule, as our rulebook reads it: Proceeds may not be used for: payments, distributions or loans to Associates (except ordinary compensation for services or a change of ownership under 120.202); refinancing debt owed to an SBIC or NMVCC; floor plan or other revolving credit except CAPLines; real or personal property held primarily for sale, lease or investment (except EPC or a small contractor under 120.310); past-due Federal, state or local payroll, sales or other trust-fund taxes; any purpose that does not benefit the small business; or any use restricted by 120.201 (13 CFR 120.130). The SOP's refinancing limits (MCA/factoring, same-lender debt) are SOP text not yet read (see M1-V81-014)

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-USE-001.

Early default triggers full guaranty review

Status: Needs a person

What we checked

Whether the file holds: credit memo

What we found

Present: credit memo. Presence only; content not tested in v0.

Where in the file

Credit_Memo_Pinecrest.docx

Why it matters

Early default (within 18 months of final disbursement) triggers full guaranty review; underwriting, valuation, affiliate treatment, equity and repayment ability are the recurring OIG findings

Why believe this

5 corpus entries name this failure.

D-131 (deficiencies): Early-default file (default within 18 months of final disbursement) not built to the highest-scrutiny standard (MULTI-SOURCE, 11 sources)
PI-014 (PIIA-CORPUS): Early default (within 18 months of final disbursement) with underwriting or closing defects
CA-061 (CREDIT-ANALYSIS-STANDARDS): Early-default reviews are held to "the highest degree of scrutiny" (SOP 50 51 3 as quoted in OIG 12-18; older SOP). Defaults within 18 months of final disbursement draw f…
OIG 16-19 (OIG-CORPUS): Lender did not verify eligible use of proceeds; did not assess repayment ability and size (ORIGINATION)
TW-018 (TRAINING-CORPUS): Early default (within 18 months of final disbursement) exposes any origination defect to full denial

Rule status

OIG Report 19-22; Windsor summary — rule status PRACTICE

How to fix it

A person reviews the content against the rule.

What does this mean?

If a loan fails within 18 months, SBA re-reads the whole underwriting. A person should read the memo as SBA would.

The rule we checked against

M1-CRED-011 · OIG Report 19-22; Windsor summary Rule status: PRACTICE

The rule, as our rulebook reads it: Early default (within 18 months of final disbursement) triggers full guaranty review; underwriting, valuation, affiliate treatment, equity and repayment ability are the recurring OIG findings

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-CRED-011.

Credit elsewhere: SBA assists only applicants for whom the desired credit is not otherwise available on reason

Status: Needs a person

What we checked

Whether the file holds: credit memo, personal financial statement

What we found

Present: credit memo, personal financial statement. Presence only; content not tested in v0.

Where in the file

Credit_Memo_Pinecrest.docx; PFS_413_Brightwater.xlsx; PFS_413_Linwood.xlsx

Why it matters

Credit elsewhere: SBA assists only applicants for whom the desired credit is not otherwise available on reasonable terms from non-Federal, non-State and non-local government sources; the lender must examine availability of credit, certify it on submission, and hold substantiation in its file (13 CFR 120.101). SOP 50 10 8 adds a personal-resources test for 20%+ owners (exceptions: medical, education, retirement, capex within 24 months) — that sub-clause is SOP text not yet read

Why believe this

5 corpus entries name this failure.

D-014 (deficiencies): Credit-elsewhere determination missing or unsupported (MULTI-SOURCE, 6 sources)
CA-010 (CREDIT-ANALYSIS-STANDARDS): Business cash flow of the applicant is the primary source of repayment, not liquidation of collateral.
AE-016 (CREDIT-ANALYSIS-STANDARDS): Repayment ability not adequately supported by cash flow; pre-existing tax lien not addressed; business-failure explanation unsupported
OC-023 (OCRM-PARRIS-CORPUS): Credit memo lacks SOP-required elements
OIG 19-22 (OIG-CORPUS): Material origination and closing problems: business valuations, affiliates, equity injection, repayment ability (ORIGINATION/CLOSING)

Rule status

13 CFR 120.101 (credit not available elsewhere; lender certification and file substantiation); personal-resources clause is SOP 50 10 8 §A Ch.1 ¶H (unread, UNVERIFIED sub-clause) — rule status VERIFIED

How to fix it

A person reviews the content against the rule.

What does this mean?

SBA lends where a bank would not on ordinary terms. The lender writes down why this borrower could not get the money elsewhere, and a person judges that reasoning.

The rule we checked against

M1-ELIG-014 · 13 CFR 120.101 (credit not available elsewhere; lender certification and file substantiation); personal-resources clause is SOP 50 10 8 §A Ch.1 ¶H (unread, UNVERIFIED sub-clause) Rule status: VERIFIED

The rule, as our rulebook reads it: Credit elsewhere: SBA assists only applicants for whom the desired credit is not otherwise available on reasonable terms from non-Federal, non-State and non-local government sources; the lender must examine availability of credit, certify it on submission, and hold substantiation in its file (13 CFR 120.101). SOP 50 10 8 adds a personal-resources test for 20%+ owners (exceptions: medical, education, retirement, capex within 24 months) — that sub-clause is SOP text not yet read

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-ELIG-014.

Borrower and guarantor signatures appear on the Note and Guarantee forms themselves, not only on addenda. No S

Status: Ready

What we checked

Whether the file holds: SBA Note (Form 147), guaranty (Form 148)

What we found

Present: SBA Note (Form 147), guaranty (Form 148). Presence only; content not tested in v0.

Where in the file

SBA_Note_Form_147.docx; SBA_Form_148_Guaranty_Brightwater.docx; SBA_Form_148_Guaranty_Linwood.docx

Why it matters

Borrower and guarantor signatures appear on the Note and Guarantee forms themselves, not only on addenda. No SBA text read so far says this; the Guarantee instructions (06/25 ¶J) say only that the signature block names the legal signer and, where it applies, the authorized representative

Why believe this

5 corpus entries name this failure.

D-081 (deficiencies): Borrower signatures on an addendum only, none on the SBA-required form itself (SINGLE-SOURCE, 1 sources)
CA-016 (CREDIT-ANALYSIS-STANDARDS): Global cash flow: consider affiliates' cash flow and guarantors' personal obligations. Whether the SOP text *mandates* a global cash flow analysis could not be confirmed.…
AE-003 (CREDIT-ANALYSIS-STANDARDS): Unsupported add-backs (personal income, guaranteed payments)
OC-031 (OCRM-PARRIS-CORPUS): No proof guarantors had outside income supporting the injection
OIG 26-09 (OIG-CORPUS): Incomplete root-cause and tolerable-rate publication; risk assessments missing; PPP guaranty-purchase sampling not reliable; corrective action plans undocumented; targets…

Rule status

Instructions for SBA Forms 148 and 148L (06/25) ¶J, signature block only; the addenda point has no SBA source — rule status PRACTICE

What does this mean?

The borrower and each guarantor sign the Note and the guaranties.

The rule we checked against

M1-CLOSE-001 · Instructions for SBA Forms 148 and 148L (06/25) ¶J, signature block only; the addenda point has no SBA source Rule status: PRACTICE

The rule, as our rulebook reads it: Borrower and guarantor signatures appear on the Note and Guarantee forms themselves, not only on addenda. No SBA text read so far says this; the Guarantee instructions (06/25 ¶J) say only that the signature block names the legal signer and, where it applies, the authorized representative

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-CLOSE-001.

Loan closing documents are completed in line with the E-Tran Terms and Conditions: the Note and Guarantees are

Status: Ready

What we checked

Whether the file holds: SBA Note (Form 147)

What we found

Present: SBA Note (Form 147). Presence only; content not tested in v0. Not checked in v0: E-Tran Terms and Conditions, closing checklist.

Where in the file

SBA_Note_Form_147.docx

Why it matters

Loan closing documents are completed in line with the E-Tran Terms and Conditions: the Note and Guarantees are filled in from them, and the SBA Loan Number, loan name, borrower names, guarantor names and amounts are the same in the Terms and Conditions, the Note and each Guarantee; the Lender meets the other required terms and conditions before or at disbursement

Why believe this

5 corpus entries name this failure.

D-085 (deficiencies): Loan closed on terms different from the SBA Loan Authorization (conditions, amount, collateral, maturity) (MULTI-SOURCE, 6 sources)
OIG ROM 11-06 (OIG-CORPUS): Repayment ability, ineligible use of proceeds, questionable eligibility, improper guaranty amount; SBA officers missed 3 (ORIGINATION/PURCHASE)
CA-016 (CREDIT-ANALYSIS-STANDARDS): Global cash flow: consider affiliates' cash flow and guarantors' personal obligations. Whether the SOP text *mandates* a global cash flow analysis could not be confirmed.…
AE-003 (CREDIT-ANALYSIS-STANDARDS): Unsupported add-backs (personal income, guaranteed payments)
OC-017 (OCRM-PARRIS-CORPUS): Working-capital disbursements not monitored or documented (other than normal operating expenses)

Rule status

SOP 50 10 8 §B Ch.5 ¶D.4-D.5, PDF p.320-322; Instructions for SBA Forms 148 and 148L (06/25) ¶C, ¶E, ¶F — rule status VERIFIED

What does this mean?

The loan has to close on the terms SBA authorized. Any difference needs SBA's approval.

The rule we checked against

M1-CLOSE-002 · SOP 50 10 8 §B Ch.5 ¶D.4-D.5, PDF p.320-322; Instructions for SBA Forms 148 and 148L (06/25) ¶C, ¶E, ¶F Rule status: VERIFIED

The rule, as our rulebook reads it: Loan closing documents are completed in line with the E-Tran Terms and Conditions: the Note and Guarantees are filled in from them, and the SBA Loan Number, loan name, borrower names, guarantor names and amounts are the same in the Terms and Conditions, the Note and each Guarantee; the Lender meets the other required terms and conditions before or at disbursement

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-CLOSE-002.

Guarantees: every holder of at least a 20 percent ownership interest generally must guarantee the loan)

Status: Ready

What we checked

Whether the file holds: guaranty (Form 148), personal financial statement

What we found

Present: guaranty (Form 148), personal financial statement. Presence only; content not tested in v0.

Where in the file

SBA_Form_148_Guaranty_Brightwater.docx; SBA_Form_148_Guaranty_Linwood.docx; PFS_413_Brightwater.xlsx; PFS_413_Linwood.xlsx

Why it matters

Guarantees: every holder of at least a 20 percent ownership interest generally must guarantee the loan (13 CFR 120.160(a)); SBA or a delegated lender may require additional guarantors. SOP 50 10 8 wording ("direct or indirect owner" replacing "beneficial owner"), Form 148/148L editions, and the guarantor financial-statement requirement are SOP text not yet read

Why believe this

5 corpus entries name this failure.

D-069 (deficiencies): Owners of 20% or more did not give an unlimited guaranty (THIN, 2 sources)
CA-016 (CREDIT-ANALYSIS-STANDARDS): Global cash flow: consider affiliates' cash flow and guarantors' personal obligations. Whether the SOP text *mandates* a global cash flow analysis could not be confirmed.…
AE-003 (CREDIT-ANALYSIS-STANDARDS): Unsupported add-backs (personal income, guaranteed payments)
OC-031 (OCRM-PARRIS-CORPUS): No proof guarantors had outside income supporting the injection
OIG 26-09 (OIG-CORPUS): Incomplete root-cause and tolerable-rate publication; risk assessments missing; PPP guaranty-purchase sampling not reliable; corrective action plans undocumented; targets…

Rule status

13 CFR 120.160(a) (holders of at least a 20 percent ownership interest generally must guarantee the loan; SBA or the lender may require others); SOP 50 10 8 §A form editions and "direct or indirect owner" wording (unread); Forms 148/148L — rule status VERIFIED

What does this mean?

Every owner of 20% or more signs a personal guaranty.

The rule we checked against

M1-COLL-007 · 13 CFR 120.160(a) (holders of at least a 20 percent ownership interest generally must guarantee the loan; SBA or the lender may require others); SOP 50 10 8 §A form editions and "direct or indirect owner" wording (unread); Forms 148/148L Rule status: VERIFIED

The rule, as our rulebook reads it: Guarantees: every holder of at least a 20 percent ownership interest generally must guarantee the loan (13 CFR 120.160(a)); SBA or a delegated lender may require additional guarantors. SOP 50 10 8 wording ("direct or indirect owner" replacing "beneficial owner"), Form 148/148L editions, and the guarantor financial-statement requirement are SOP text not yet read

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-COLL-007.

IRS transcripts match the tax returns

Status: Ready

What we checked

An IRS transcript for every tax year relied on, with totals matching the returns

What we found

Transcripts for 2023, 2024, 2025 match the returns within 1% / $1,000.00.

Where in the file

Tax_Returns_2023-2025.xlsx, sheet Returns, cell B3; IRS_Transcripts_4506C.csv, row 2, column 3; Tax_Returns_2023-2025.xlsx, sheet Returns, cell B5; IRS_Transcripts_4506C.csv, row 2, column 4; Tax_Returns_2023-2025.xlsx, sheet Returns, cell C3; IRS_Transcripts_4506C.csv, row 3, column 3; Tax_Returns_2023-2025.xlsx, sheet Returns, cell C5; IRS_Transcripts_4506C.csv, row 3, column 4; Tax_Returns_2023-2025.xlsx, sheet Returns, cell D3; IRS_Transcripts_4506C.csv, row 4, column 3; Tax_Returns_2023-2025.xlsx, sheet Returns, cell D5; IRS_Transcripts_4506C.csv, row 4, column 4

Why it matters

Unverified tax returns are a leading reason SBA denies or repairs a guaranty.

Why believe this

16 independent sources name this failure (D-030). SBA can: deny the guaranty · call the payment improper

SBA NGPC guaranty purchase pages (PR-S02, PR-S03) (SBA-PAGE): IRS income tax verification often missing or incorrect
OIG 26-14 (OIG): did not request, receive and reconcile IRS transcripts (31 in bucket)
OIG 26-12 (OIG): IRS tax verification, 4 loans, $1,500,000.00
OIG ROM 11-07 (OIG): IRS verification among gaps
Starfield 2024 IRS tax transcripts (PR-S18 = TW-S31) (LAW-FIRM): no record, discrepancies, 10 business days then Second Request

If it cannot be fixed: Where transcripts cannot be obtained, document the second request and proof of filing/payment; SBA still treats missing verification on an early default as full-denial exposure.

Rule status

SOP 50 10 8 Section A Ch.5 ¶B.1-B.4, PDF p.90-92 (Form 8821 designee rules p.91-92) — rule status VERIFIED

What does this mean?

SBA wants proof the tax returns in the file are the ones the IRS has.

The rule we checked against

M1-CRED-006 · SOP 50 10 8 Section A Ch.5 ¶B.1-B.4, PDF p.90-92 (Form 8821 designee rules p.91-92) Rule status: VERIFIED

The rule, as our rulebook reads it: Applicant tax data verified: transcripts for the last 3 years under the NAICS size standard (2 years under the alternative size standard; all years if shorter), not required for the most recent fiscal year if year-end falls within 6 months of the date SBA received the application (extension plus evidence of estimated tax payments instead); no transcript or Record Not Found: no disbursement until resolved; follow up with IRS after 10 business days

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-CRED-006.

All owners are US citizens or nationals

Status: Ready

What we checked

Every direct and indirect owner is a US citizen or US national with a US principal residence

What we found

2 natural-person owners, all shown as US citizens with US residence.

Where in the file

Ownership_Chart.docx, table 0, row 1, column 4; Ownership_Chart.docx, table 0, row 2, column 4

Why it matters

Loan numbers on or after 2026-03-01 need 100% US citizen/national ownership.

Why believe this

5 independent sources name this failure (D-008). SBA can: deny the guaranty

Starfield 2025 eligibility key points (TW-S08) (LAW-FIRM): non-citizen ownership on the eligibility list
PilieroMazza 2026 acquisitions (TW-S16) (LAW-FIRM): non-citizens and non-U.S. entities now excluded
Starfield 2025 SOP 50 10 8 (TW-S37) (LAW-FIRM): conditional LPR restriction
Coleman 2025 SOP 50 57 4 webinar (PR-S07 = TW-S06) (LSP): citizenship verification for new obligors
FileInvite denial reasons (TW-S33), applicant-side vendor (LSP): foreign operations and incarceration among legal/eligibility reasons

If it cannot be fixed: At purchase, disclose the defect in the package narrative and show the borrower would have qualified on the facts (documents dated before approval). Ineligibility itself is a full-denial ground, so there is little to argue if the business is in fact ineligible

Rule status

Policy Notice 5000-876441 — rule status VERIFIED

What does this mean?

SBA changed the ownership rule in 2026. A file that would have passed last year can fail now.

The rule we checked against

M1-ELIG-004 · Policy Notice 5000-876441 Rule status: VERIFIED

The rule, as our rulebook reads it: Effective date of 5000-876441 is 2026-03-01 for loans receiving SBA loan numbers on/after that date (SBA page states effective date; loan-number wording from NAGGL)

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-ELIG-004.

Business type is not on the ineligible short list

Status: Ready

What we checked

The business description and NAICS code against a short list of 13 CFR 120.110 ineligible types

What we found

Description "Companion-animal veterinary clinic", NAICS 541940: no match on the v0 short list.

Where in the file

Pinecrest_Loan_Export.csv, row 2, column 10; Pinecrest_Loan_Export.csv, row 2, column 9

Why it matters

The short list is a screen, not the full 120.110 test.

Why believe this

8 independent sources name this failure (D-001). SBA can: deny the guaranty

SBA NGPC guaranty purchase pages (PR-S02, PR-S03) (SBA-PAGE): lists ineligible franchise, purpose or recipient among top repair/denial reasons
13 CFR 120.524 (PR-S01) (SBA-TEXT): SBA released if lender materially fails a Loan Program Requirement
OIG 26-14 (OIG): 20 eligibility exceptions in the two-SBLC review (passive business the example)
Windsor Advantage top 6 repair/denial reasons (PR-S04 = TW-S (LSP): eligibility is reason #1 (ineligible franchise/industry, improper structure)
Coleman/SBA Complete 2013 repairs and denials (PR-S06 = TW-S (LSP): ineligible loan is a denial ground

Rule status

13 CFR 120.110(a)-(s) (letters k,l not returned by fetch) — rule status VERIFIED

What does this mean?

SBA does not lend to some kinds of businesses. This check reads the business type against that list.

The rule we checked against

M1-ELIG-008 · 13 CFR 120.110(a)-(s) (letters k,l not returned by fetch) Rule status: VERIFIED

The rule, as our rulebook reads it: Business type must not be an ineligible business under 13 CFR 120.110 (non-profit, lender, passive, life insurer, foreign, pyramid, over 1/3 gambling, illegal, private club, government-owned, packager over 1/3, incarcerated/indicted associate, lender equity interest, prurient, prior federal default, lobbying, speculative)

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-ELIG-008.

CAIVRS is clear

Status: Ready

What we checked

A CAIVRS result is in the file for the applicant and principals

What we found

3 results, all clear.

Where in the file

CAIVRS_Results.txt, line 3; CAIVRS_Results.txt, line 5; CAIVRS_Results.txt, line 7

Why it matters

Delinquent federal debt makes the applicant ineligible.

Why believe this

7 independent sources name this failure (D-010). SBA can: deny the guaranty

Windsor Advantage top 6 repair/denial reasons (PR-S04 = TW-S (LSP): CAIVRS in the eligibility reason
Starfield 2020 UPP tabs (PR-S27) (LAW-FIRM): CAIVRS results in UPP Tab 3
Starfield 2025 eligibility key points (TW-S08) (LAW-FIRM): prior federal loan loss or delinquent federal debt
WBD SBA Fundamentals deck 2024 (TW-S34) (TRADE-ASSOC): CAIVRS not run; delinquent over 90 days
Starfield 2025 SOP 50 10 8 (TW-S37) (LAW-FIRM): delinquent SBA financing bars

If it cannot be fixed: If the printout is missing, run it now and show no federal debt existed at approval; disclose the gap.

Rule status

13 CFR 120.110(q) (prior Federal loan default causing a loss makes the business ineligible unless waived); CAIVRS search mechanism is SOP 50 10 8 (unread) — rule status VERIFIED

What does this mean?

CAIVRS is the government's list of people behind on federal debt. SBA wants to see you looked.

The rule we checked against

M1-ELIG-015 · 13 CFR 120.110(q) (prior Federal loan default causing a loss makes the business ineligible unless waived); CAIVRS search mechanism is SOP 50 10 8 (unread) Rule status: VERIFIED

The rule, as our rulebook reads it: Applicant, its Associates and businesses they previously owned or controlled must not have defaulted on a Federal loan or Federally assisted financing that caused the government a loss (13 CFR 120.110(q), waivable); the SOP-prescribed evidence is a CAIVRS check clear for the business and each principal (SOP text unread)

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-ELIG-015.

Form 1919 is present for every required party

Status: Ready

What we checked

A Form 1919 (02/2025 edition, signed) for the applicant and every 20%+ owner

What we found

3 parties, each with a signed 02/2025 Form 1919.

Where in the file

SBA_Form_1919_Pinecrest_Inc.docx, paragraph 1; SBA_Form_1919_Pinecrest_Inc.docx, paragraph 3; SBA_Form_1919_Pinecrest_Inc.docx, paragraph 6; SBA_Form_1919_Linwood.docx, paragraph 1; SBA_Form_1919_Linwood.docx, paragraph 3; SBA_Form_1919_Linwood.docx, paragraph 6; SBA_Form_1919_Brightwater.docx, paragraph 1; SBA_Form_1919_Brightwater.docx, paragraph 3; SBA_Form_1919_Brightwater.docx, paragraph 6

Why it matters

Required party forms are complete.

Why believe this

5 independent sources name this failure (D-080). SBA can: return the package · cite it in a review

OIG 26-14 (OIG): technical exceptions 21 (Form 1919, 1920, 1050, 159)
Doeren Mayhew loan review problems (OC-S7) (LSP): forms and memo alignment
Jellum Law PARRiS citation (OC-S8) (LAW-FIRM): 1919 and signature practice
LRM screen-outs and hold codes (OC-S35) (LSP): screen-out for incomplete or unsigned 1919/1920
sba7a.loans memo/DSCR posts (CA-S16, CA-S36), weak (LSP): cross-check 1919 to memo

If it cannot be fixed: Correct and re-sign where the party is available.

Rule status

SBA Form 1919 page (edition 2025-03-19, OMB 3245-0348 — read on legacy.sba.gov); LGPC checklist v2.0 Tab 1 — rule status VERIFIED

What does this mean?

SBA re-issues its forms. An old edition, or a missing owner's form, is treated as missing.

The rule we checked against

M1-FORM-001 · SBA Form 1919 page (edition 2025-03-19, OMB 3245-0348 — read on legacy.sba.gov); LGPC checklist v2.0 Tab 1 Rule status: VERIFIED

The rule, as our rulebook reads it: SBA Form 1919 Borrower Information Form: the current edition is the one SBA posts dated 2025-03-19 (form revision 02/2025; OMB 3245-0348), completed by the small business applying for a 7(a) loan and submitted to the lender (SBA form page). Expiration date (2027-06-30 per a bank-hosted copy) not shown on the SBA page; older editions (2024-05-30, 2023-09-20, 2020-11-30) are superseded. Currency: the Form 1919 is dated within 120 days of submission to SBA (LGPC Checklist July 2026 Tab 1; see M2-CHK-003); the day count does not belong to this edition rule

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-FORM-001.

Rules used: SOP 50 10 8 (as amended)

Status: Ready

What we checked

The E-Tran loan-number date

What we found

Date used 2026-07-14 (application received date, else loan-number date); SOP 50 10 8 (as amended) applies.

Where in the file

Loan_Authorization_Pinecrest.docx, paragraph 2

Why it matters

Every origination rule is read in the version in force on the loan-number date.

Why believe this

5 independent sources name this failure (D-148). SBA can: deny the guaranty · repair (reduce) the guaranty

Coleman top 20 reasons (TW-S03 = TW-S41) (LSP): SOP 50 10 8.1
Coleman 2025 SOP 50 57 4 webinar (PR-S07 = TW-S06) (LSP): 3.1 rules no longer enough
WBD SBA Fundamentals deck 2024 (TW-S34) (TRADE-ASSOC): outdated SOP on deck
Starfield 2025 SOP 50 10 8 (TW-S37) (LAW-FIRM): SOP 8 changes
NAGGL SOP 8.1 announcement (CA-S09) (TRADE-ASSOC): 8.1 issuance

Rule status

SOP 50 10 8 (eff. 2025-06-01); SBA SOP 50 10 versions page — rule status VERIFIED

What does this mean?

This loan was numbered before the October 1, 2026 change, so the older rulebook applies.

The rule we checked against

M1-VER-001 · SOP 50 10 8 (eff. 2025-06-01); SBA SOP 50 10 versions page Rule status: VERIFIED

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-VER-001.

The closing retention set is present

Status: Ready

What we checked

The retention set: Note 147, Guaranty 148, Form 1050, Form 159 (if an agent), Form 155 (if standby debt), IRS transcripts

What we found

All required retention documents found. Borrower certifications are not a document class in v0 and were not checked.

Where in the file

SBA_Note_Form_147.docx; SBA_Form_1050_Settlement_Sheet.docx; IRS_Transcripts_4506C.csv; SBA_Form_148_Guaranty_Brightwater.docx; SBA_Form_148_Guaranty_Linwood.docx; SBA_Form_159_Fee_Disclosure.docx

Why it matters

The retained file supports a future purchase review.

Why believe this

26 independent sources name this failure (D-071). SBA can: deny the guaranty · take enforcement action · call the payment improper · cite it in a review

OIG ROM 10-12 (OIG): origination/closing deficiencies
OIG ROM 11-07 (OIG): 24 of 60 loans (40%)
OIG 12-11R (OIG): material deficiencies in 14 of 25
OIG 13-16R (OIG): material origination or closing deficiency in the OIG catalogue (Table 1)
OIG 14-09 (OIG): material origination or closing deficiency in the OIG catalogue (Table 1)

If it cannot be fixed: At purchase, disclose the gap in the package narrative and propose a repair sized to any loss it caused. Where the closing paper exists but is unrecorded or unsigned, cure it and say so; where the paper never existed, expect repair or denial.

Rule status

LGPC loan-closing page — rule status VERIFIED

What does this mean?

SBA lists the documents a lender keeps after closing. This check looks for that set.

The rule we checked against

M1-CLOSE-003 · LGPC loan-closing page Rule status: VERIFIED

The rule, as our rulebook reads it: Required retention file: Form 147 note, Form 148 guarantee, Form 1050, Form 159, Form 155 standby, borrower certifications, IRS tax transcripts

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-CLOSE-003.

Insurance binder names the lender as loss payee

Status: Ready

What we checked

An insurance binder on pledged collateral naming the lender as loss payee (loans over $50,000.00)

What we found

Loss payee: Keystone Test Bank, N.A., its successors and/or assigns, as lender loss payee.

Where in the file

Insurance_Binder_Pinecrest.docx, paragraph 4

Why it matters

Collateral is insured for the lender.

Why believe this

7 independent sources name this failure (D-077). SBA can: repair (reduce) the guaranty

OIG 20-03 (OIG): missing insurance evidence
OIG 26-14 (OIG): insurance among recurring deficiencies (31-item bucket)
Starfield 2023 insurance errors (PR-S12) (LAW-FIRM): common insurance errors
Starfield 2020 on OIG 20-03 (TW-S17; OC-S3) (LAW-FIRM): missing insurance evidence
FunderIntel on OIG 26-14 (OC-S34 = TW-S21 = CA-S29) (TRADE-ASSOC): insurance a recurring deficiency

Rule status

SOP 50 10 8 §A Ch.5 ¶Insurance 1 (Hazard Insurance) PDF p.92-93, citing 13 CFR 120.160(c) — rule status VERIFIED

What does this mean?

If the collateral burns down, the lender must be the one the insurer pays.

The rule we checked against

M1-COLL-004 · SOP 50 10 8 §A Ch.5 ¶Insurance 1 (Hazard Insurance) PDF p.92-93, citing 13 CFR 120.160(c) Rule status: VERIFIED

The rule, as our rulebook reads it: Hazard insurance is required on all assets pledged as collateral for 7(a) loans greater than $50,000.00; full replacement cost (or maximum insurable value if unavailable); mortgagee clause (real estate) or lender's loss payable clause (personal property) in favor of the lender; at least 10 days' prior written notice of cancellation; if hazard insurance is not available the loan cannot be approved; SBA Express/Export Express lenders may waive with the reason documented

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-COLL-004.

Historical and current financials: income statement and balance sheet dated within 120 days of submission

Status: Ready

What we checked

Whether the file holds: historical financial statements

What we found

Present: historical financial statements. Presence only; content not tested in v0.

Where in the file

Historical_Financials.xlsx

Why it matters

Historical and current financials: income statement and balance sheet dated within 120 days of submission; three years historical statements/returns; affiliate financials likewise

Why believe this

1 corpus entries name this failure.

D-029 (deficiencies): Financial statements stale, incomplete, or historicals and affiliate statements missing at submission (INFERRED, 2 sources)

Rule status

LGPC 7(a) Loan Submission Checklist July 2026 p.1-2, Tabs 6-7 (not for Small Loans; 120 days of submission to SBA; FYE statements or returns for the last 3 years) — rule status VERIFIED

What does this mean?

Three years of income statements and balance sheets, plus the current period, are the base of every credit decision.

The rule we checked against

M1-CRED-009 · LGPC 7(a) Loan Submission Checklist July 2026 p.1-2, Tabs 6-7 (not for Small Loans; 120 days of submission to SBA; FYE statements or returns for the last 3 years) Rule status: VERIFIED

The rule, as our rulebook reads it: Historical and current financials: income statement and balance sheet dated within 120 days of submission; three years historical statements/returns; affiliate financials likewise

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-CRED-009.

Owner Financial Statement for each 20%+ owner and each proposed guarantor except Supplemental Guarantors, sign

Status: Ready

What we checked

Whether the file holds: personal financial statement

What we found

Present: personal financial statement. Presence only; content not tested in v0.

Where in the file

PFS_413_Brightwater.xlsx; PFS_413_Linwood.xlsx

Why it matters

Owner Financial Statement (business or personal, as applicable; SBA Form 413 or lender form) for each 20%+ owner (including spouse and minor-child assets) and each proposed guarantor except Supplemental Guarantors, signed and dated within 120 days of submission to SBA (the v2.0 checklist said 90)

Why believe this

5 corpus entries name this failure.

D-045 (deficiencies): Personal financial statement missing, stale or unverified for 20%+ owners and guarantors (INFERRED, 2 sources)
CA-016 (CREDIT-ANALYSIS-STANDARDS): Global cash flow: consider affiliates' cash flow and guarantors' personal obligations. Whether the SOP text *mandates* a global cash flow analysis could not be confirmed.…
AE-003 (CREDIT-ANALYSIS-STANDARDS): Unsupported add-backs (personal income, guaranteed payments)
OC-031 (OCRM-PARRIS-CORPUS): No proof guarantors had outside income supporting the injection
OIG 26-09 (OIG-CORPUS): Incomplete root-cause and tolerable-rate publication; risk assessments missing; PPP guaranty-purchase sampling not reliable; corrective action plans undocumented; targets…

Rule status

LGPC 7(a) Loan Submission Checklist July 2026 p.1, Tab 4 — rule status VERIFIED

What does this mean?

Every owner of 20% or more gives SBA a personal financial statement.

The rule we checked against

M1-CRED-010 · LGPC 7(a) Loan Submission Checklist July 2026 p.1, Tab 4 Rule status: VERIFIED

The rule, as our rulebook reads it: Owner Financial Statement (business or personal, as applicable; SBA Form 413 or lender form) for each 20%+ owner (including spouse and minor-child assets) and each proposed guarantor except Supplemental Guarantors, signed and dated within 120 days of submission to SBA (the v2.0 checklist said 90)

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-CRED-010.

Equity injection must be verified: 3 months of statements preceding injection, explanation of large deposits,

Status: Ready

What we checked

Whether the file holds: bank statements

What we found

Present: bank statements. Presence only; content not tested in v0. Not checked in v0: gift letters, cancelled checks/wires.

Where in the file

Bank_Statement_Pinecrest_2026-08.csv

Why it matters

Equity injection must be verified: 3 months of statements preceding injection, explanation of large deposits, account activity summary through closing, gift letters with donor statements, outside-income proof for borrowed funds

Why believe this

5 corpus entries name this failure.

D-048 (deficiencies): Equity injection not documented, or not traceable from the source account to the project payment (MULTI-SOURCE, 27 sources)
CA-050 (CREDIT-ANALYSIS-STANDARDS): SOP 8: minimum 10% equity injection of total project costs for startups and complete changes of ownership (ESOP exempt). Total project costs include purchase price plus f…
AE-011 (CREDIT-ANALYSIS-STANDARDS): Equity injection under-documented
OC-028 (OCRM-PARRIS-CORPUS): Equity injection source and use not documented (audit trail incomplete)
OIG 20-18 (OIG-CORPUS): Lender lacked evidence of closing per SBA rules, equity injection (CLOSING)

Rule status

Lender practice; SOP equity-verification paragraph UNVERIFIED — rule status PRACTICE

What does this mean?

It is not enough that the borrower's money showed up at closing. SBA wants to see where it came from, in bank statements.

The rule we checked against

M1-EQ-003 · Lender practice; SOP equity-verification paragraph UNVERIFIED Rule status: PRACTICE

The rule, as our rulebook reads it: Equity injection must be verified: 3 months of statements preceding injection, explanation of large deposits, account activity summary through closing, gift letters with donor statements, outside-income proof for borrowed funds

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-EQ-003.

No agent fee is mentioned; compensation rules not triggered

Status: Ready

What we checked

Agent or packager compensation, whenever any document mentions a packager, agent or broker fee

What we found

No document mentions a packager, agent or broker fee.

Where in the file

not in the file

Why it matters

The compensation rules apply only when an agent or packager is paid.

Why believe this

5 corpus entries name this failure.

D-082 (deficiencies): SBA Form 159 fee disclosure wrong, missing or inconsistent with the closing statement (MULTI-SOURCE, 5 sources)
OC-021 (OCRM-PARRIS-CORPUS): SBA Form 159 fee disclosure and compensation agreement errors
TW-030 (TRAINING-CORPUS): Prohibited or improper fees (agent/packager, LSP paid by applicant)
OIG 24-01 (OIG-CORPUS): OCRM staff 42 to 26 (-38%); challenge 6: identifying improper payments in 7(a) remains a challenge; loans with an LSP performed worse on purchase and early default; Form …
OC-026 (OCRM-PARRIS-CORPUS): Prohibited fees charged to borrower or improper agent fees

Rule status

13 CFR 103.5 (applicant and agent must execute a compensation agreement; SBA may deem compensation unreasonable and require reduction/refund); 13 CFR 103.4 (fees without a necessary and reasonable relationship to services rendered are good cause for suspension); 13 CFR 120.221(a) (lender packaging fees must be reasonable and customary; applicant told in writing it need not buy unwanted services); the $2,500.00 / 1% thresholds are SOP 50 10 8 (unread) — rule status VERIFIED

What does this mean?

Fees paid to packagers and agents have limits and must be disclosed on Form 159.

The rule we checked against

M1-FEE-002 · 13 CFR 103.5 (applicant and agent must execute a compensation agreement; SBA may deem compensation unreasonable and require reduction/refund); 13 CFR 103.4 (fees without a necessary and reasonable relationship to services rendered are good cause for suspension); 13 CFR 120.221(a) (lender packaging fees must be reasonable and customary; applicant told in writing it need not buy unwanted services); the $2,500.00 / 1% thresholds are SOP 50 10 8 (unread) Rule status: VERIFIED

The rule, as our rulebook reads it: Agent and packager compensation must be under an executed compensation agreement, reasonable in relation to services actually rendered, and subject to SBA reduction or refund if deemed unreasonable (13 CFR 103.4-103.5); lender packaging fees must be reasonable and customary for the area and the applicant advised in writing it need not pay for services it does not want (13 CFR 120.221(a)). The specific $2,500.00 / 1% SOP thresholds cited by Coleman are SOP text not yet read

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-FEE-002.

A separate Form 1919 is completed and signed for each Co-Borrower

Status: Ready

What we checked

Whether the file holds: SBA Form 1919

What we found

Present: SBA Form 1919. Presence only; content not tested in v0.

Where in the file

SBA_Form_1919_Brightwater.docx; SBA_Form_1919_Linwood.docx; SBA_Form_1919_Pinecrest_Inc.docx

Why it matters

A separate Form 1919 is completed and signed for each Co-Borrower; the ownership table names every entity owning at least 20% of the Applicant and the natural persons who own those entities, and at least 51% of the Beneficial Owners; a demographic section is completed for each individual holding 20 percent or more

Why believe this

4 corpus entries name this failure.

D-080 (deficiencies): SBA Form 1919 (or 1920 on earlier loans) incomplete, inaccurate, unsigned or inconsistent with the credit memo (MULTI-SOURCE, 5 sources)
OC-018 (OCRM-PARRIS-CORPUS): SBA Form 1919 incomplete or inaccurate
CA-062 (CREDIT-ANALYSIS-STANDARDS): Lender's memo is scanned by reviewers: life insurance, IRS transcript verification and certification, complete collateral schedules, use of proceeds, refinanced notes, de…
PR-012 (PURCHASE-REPAIR-DENIAL-CORPUS): Key manager or owner criminal history not screened

Rule status

SOP 50 10 8 Section B Ch.1, SBA Form 1919 (PDF p.143); SBA Form 1919 (02/2025) pp.1-2 — rule status VERIFIED

What does this mean?

This check passed on the documents in the file. The page it rests on is shown above.

The rule we checked against

M1-FORM-002 · SOP 50 10 8 Section B Ch.1, SBA Form 1919 (PDF p.143); SBA Form 1919 (02/2025) pp.1-2 Rule status: VERIFIED

The rule, as our rulebook reads it: A separate Form 1919 is completed and signed for each Co-Borrower; the ownership table names every entity owning at least 20% of the Applicant and the natural persons who own those entities, and at least 51% of the Beneficial Owners; a demographic section is completed for each individual holding 20 percent or more

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-FORM-002.

Form 159 is in the file

Status: Ready

What we checked

Form 159 is in the file whenever any document mentions a packager, agent or broker fee

What we found

Form 159 present.

Where in the file

SBA_Form_159_Fee_Disclosure.docx

Why it matters

Fee disclosure is documented.

Why believe this

5 independent sources name this failure (D-082). SBA can: cite it in a review · return the package

OIG 26-14 (OIG): technical exceptions including Form 159
Doeren Mayhew loan review problems (OC-S7) (LSP): 159 errors
Jellum Law PARRiS citation (OC-S8) (LAW-FIRM): 159
OIG 15-16 (OIG): agent disclosure data poor and incomplete (SBA-side)
OIG 24-01 (OIG): Form 159 agent tracking gap (SBA-side)

Rule status

SOP 50 10 8 Section A Ch.4 ¶D.8 (Disclosure of Fees, SBA Form 159), PDF p.70 (signatures; lender signs twice); Section A Ch.4 PDF p.65 (Lender fees over $2,500.00); Section B Ch.5 closing documents PDF p.321 (Form 159 for Lender fees over $2,500.00 and for any Agents); 13 CFR 103.5 — rule status VERIFIED

What does this mean?

Any time someone was paid to help with the application, SBA wants that fee written down on its own form.

The rule we checked against

M1-FORM-004 · SOP 50 10 8 Section A Ch.4 ¶D.8 (Disclosure of Fees, SBA Form 159), PDF p.70 (signatures; lender signs twice); Section A Ch.4 PDF p.65 (Lender fees over $2,500.00); Section B Ch.5 closing documents PDF p.321 (Form 159 for Lender fees over $2,500.00 and for any Agents); 13 CFR 103.5 Rule status: VERIFIED

The rule, as our rulebook reads it: SBA Form 159 must be completed and signed by the Applicant, the Agent and the Lender for Agents not covered by an SBA-reviewed LSP agreement; when the Lender pays the Agent, the Lender identifies the Agent on Form 159 and the Lender and Applicant sign; a Lender acting as both Lender and Agent signs twice. Form 159 also required for Lender fees over $2,500.00. No contingency fees.

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-FORM-004.

Tax return transcripts obtained and the Applicant's financial data reconciled to them before first 7 disbursem

Status: Ready

What we checked

Whether the file holds: IRS tax transcripts (4506-C)

What we found

Present: IRS tax transcripts (4506-C). Presence only; content not tested in v0.

Where in the file

IRS_Transcripts_4506C.csv

Why it matters

Tax return transcripts obtained (IVES, or IRS Form 8821 with the Lender as designee) and the Applicant's financial data reconciled to them before first 7(a) disbursement; significant differences resolved to the Lender's satisfaction (and the SBA processing center if non-delegated). Form 4506-C is the IVES request form and is on the closing document list.

Why believe this

5 corpus entries name this failure.

D-030 (deficiencies): IRS tax transcripts not requested, received or reconciled to the returns and financials used (MULTI-SOURCE, 16 sources)
CA-062 (CREDIT-ANALYSIS-STANDARDS): Lender's memo is scanned by reviewers: life insurance, IRS transcript verification and certification, complete collateral schedules, use of proceeds, refinanced notes, de…
OC-020 (OCRM-PARRIS-CORPUS): SBA Form 1050 settlement sheet not executed properly / at first disbursement
OIG ROM 11-07 (OIG-CORPUS): 24 of 60 (40%): creditworthiness, eligibility, equity injection, use of proceeds, IRS verification (ORIGINATION/CLOSING)
TW-003 (TRAINING-CORPUS): IRS tax transcripts not obtained, not verified, or not reconciled before disbursement

Rule status

SOP 50 10 8 Section A Ch.5 ¶B.4 (tax return transcripts and reconciliation), PDF p.91-92; Section B Ch.5 required closing documents (IRS Form 4506-C or Form 8821), PDF p.321 — rule status VERIFIED

What does this mean?

SBA wants proof the tax returns in the file are the ones the IRS has.

The rule we checked against

M1-FORM-006 · SOP 50 10 8 Section A Ch.5 ¶B.4 (tax return transcripts and reconciliation), PDF p.91-92; Section B Ch.5 required closing documents (IRS Form 4506-C or Form 8821), PDF p.321 Rule status: VERIFIED

The rule, as our rulebook reads it: Tax return transcripts obtained (IVES, or IRS Form 8821 with the Lender as designee) and the Applicant's financial data reconciled to them before first 7(a) disbursement; significant differences resolved to the Lender's satisfaction (and the SBA processing center if non-delegated). Form 4506-C is the IVES request form and is on the closing document list.

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-FORM-006.

The Lender may use its own Note and guaranty forms or SBA Forms 147, 148 and 148L

Status: Ready

What we checked

Whether the file holds: SBA Note (Form 147)

What we found

Present: SBA Note (Form 147). Presence only; content not tested in v0. Not checked in v0: executed Guarantees.

Where in the file

SBA_Note_Form_147.docx

Why it matters

The Lender may use its own Note and guaranty forms or SBA Forms 147, 148 and 148L; SBA Forms 148 and 148L are used without altering the text, with only the required insertions; a Lender's own Note carries the SBA federal-law sentence, is legally enforceable and assignable, has a stated maturity and is not payable on demand; a Lender's own guaranty carries the SBA federal-law sentence. Edition dates of the SBA forms are not set by the SOP text and stay with the form pages

Why believe this

5 corpus entries name this failure.

D-079 (deficiencies): Required SBA forms not used, altered, or not exact electronic copies (MULTI-SOURCE, 4 sources)
CA-016 (CREDIT-ANALYSIS-STANDARDS): Global cash flow: consider affiliates' cash flow and guarantors' personal obligations. Whether the SOP text *mandates* a global cash flow analysis could not be confirmed.…
AE-003 (CREDIT-ANALYSIS-STANDARDS): Unsupported add-backs (personal income, guaranteed payments)
OC-031 (OCRM-PARRIS-CORPUS): No proof guarantors had outside income supporting the injection
OIG 26-09 (OIG-CORPUS): Incomplete root-cause and tolerable-rate publication; risk assessments missing; PPP guaranty-purchase sampling not reliable; corrective action plans undocumented; targets…

Rule status

SOP 50 10 8 §B Ch.5 ¶D.4, PDF p.320-321; Instructions for SBA Forms 148 and 148L (06/25) ¶A-¶C — rule status VERIFIED

What does this mean?

This check passed on the documents in the file. The page it rests on is shown above.

The rule we checked against

M1-FORM-007 · SOP 50 10 8 §B Ch.5 ¶D.4, PDF p.320-321; Instructions for SBA Forms 148 and 148L (06/25) ¶A-¶C Rule status: VERIFIED

The rule, as our rulebook reads it: The Lender may use its own Note and guaranty forms or SBA Forms 147, 148 and 148L; SBA Forms 148 and 148L are used without altering the text, with only the required insertions; a Lender's own Note carries the SBA federal-law sentence, is legally enforceable and assignable, has a stated maturity and is not payable on demand; a Lender's own guaranty carries the SBA federal-law sentence. Edition dates of the SBA forms are not set by the SOP text and stay with the form pages

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-FORM-007.

Every 1050 line ties to an authorization line

Status: Ready

What we checked

Settlement sheet (1050) lines against the authorization's use-of-proceeds lines

What we found

1050 uses total 480,000; authorization lists 480,000.

Where in the file

SBA_Form_1050_Settlement_Sheet.docx, table 0, row 1, column 2; SBA_Form_1050_Settlement_Sheet.docx, table 0, row 2, column 2; SBA_Form_1050_Settlement_Sheet.docx, table 0, row 3, column 2; Loan_Authorization_Pinecrest.docx, table 0, row 1, column 1; Loan_Authorization_Pinecrest.docx, table 0, row 2, column 1; Loan_Authorization_Pinecrest.docx, table 0, row 3, column 1

Why it matters

Why believe this

5 corpus entries name this failure.

D-039 (deficiencies): Working-capital need not analyzed, or working capital used to hide ineligible uses (THIN, 2 sources)
PR-021 (PURCHASE-REPAIR-DENIAL-CORPUS): Proceeds disbursed inconsistently with the authorization
TW-094 (TRAINING-CORPUS): Authorization not amended when use of proceeds changes
PI-012 (PIIA-CORPUS): Use of proceeds outside authorized purposes (own non-SBA debt refinanced, disbursement outside limits, undocumented construction draws)
CA-061 (CREDIT-ANALYSIS-STANDARDS): Early-default reviews are held to "the highest degree of scrutiny" (SOP 50 51 3 as quoted in OIG 12-18; older SOP). Defaults within 18 months of final disbursement draw f…

Rule status

SOP 50 10 6 Part 2 §B Ch.F ¶D.3 (superseded citation); no matching sentence in SOP 50 10 8 or 8.1 in texts/ (the 20% / $50,000.00 working-capital allowance is not found) — rule status PRACTICE

What does this mean?

The money paid out at closing has to match what SBA authorized.

The rule we checked against

M1-USE-003 · SOP 50 10 6 Part 2 §B Ch.F ¶D.3 (superseded citation); no matching sentence in SOP 50 10 8 or 8.1 in texts/ (the 20% / $50,000.00 working-capital allowance is not found) Rule status: PRACTICE

The rule, as our rulebook reads it: Disbursement must match the authorization; if actual deployment differs, formally modify use categories; unlisted working capital only up to lesser of 20% of the authorized purpose or $50,000.00 (rule text from SOP 50 10 6; 8 UNVERIFIED)

Not sure what to do with this finding? Call us at (000) 000-0000 and mention rule M1-USE-003.