For SBA lenders
Short answer
Lenders must conduct a thorough review of the final loan documents (note, security agreement, loan agreement) against the SBA Loan Authorization to ensure all covenants, terms, and conditions are precisely incorporated.
The SBA Loan Authorization is the controlling document outlining the specific terms and conditions under which the SBA will guarantee the loan. Any material deviation in the lender's loan documents from the authorization can jeopardize the guaranty. Lenders must implement internal checklists and review processes to ensure accuracy.
An SBA Loan Authorization includes a specific covenant requiring the borrower to maintain a Debt Service Coverage Ratio (DSCR) of 1.25:1. The lender's closing team reviews the draft loan agreement to ensure this exact covenant, including its measurement and reporting frequency, is clearly stated before execution.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Standard 7(a) Authorization File Library
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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