For SBA lenders
Short answer
The credit memo should include a comprehensive analysis of the five Cs of credit, an assessment of the business's financial strength, and justification for the loan structure and terms.
A robust credit memo is essential for every 7(a) loan to demonstrate prudent lending. It must detail the borrower's background, financial history (business and personal), projections, use of proceeds, collateral analysis, management strength, and a clear explanation of the lender's credit decision. It should justify how the loan meets the SBA's eligibility and credit requirements.
A credit memo for a $1,000,000 7(a) acquisition loan includes sections on applicant background, industry analysis, historical and projected financials, cash flow coverage, equity injection verification, collateral valuation and lien position, personal financial statements, and a detailed risk mitigation strategy.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Sunset of SBSS Score for 7(a) Small Loans
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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