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Tomorrow: SBA, NCUA give updates on 7(a) fees, tax issues
Credit unions interested in the latest news on Small Business Administration (SBA) lending programs can get valuable information on a conference call tomorrow hosted by the SBA and NCUA. The call is part of the agencies' partnership they entered into in May 2019 to strengthen credit union small business lending and will feature representatives from SBA leadership, program offices, and loan centers.
The call is scheduled to begin at 3 p.m. Eastern and registration for the conference call is open. Here's what will be covered:
- 7(a) loan program fees;
- SBA Form 1502 reporting;
- processing requirements for qualified trusts, including 401(k)s and ROBS; and
- IRS tax transcripts.
Last April, NAFCU witness Gail Jansen of Kinecta Federal Credit union testified before a House Small Business subcommittee to share how credit unions work with the SBA to support their communities and urged against raising fees for the 7(a) loan program, which was addressed in the recently enacted federal government spending packages.
Related to tax issues, SBA requires 7(a) lenders and Certified Development Companies (CDCs) to obtain tax return transcripts through the IRS’s Income Verification Express Service (IVES) program; lenders and CDCs may either enroll in IVES or contract with an IVES participant. Although there is a recent version of IRS Form 4506-T, only the March 2019 version is compatible with IVES.
Additionally, a section of the Taxpayer First Act may impose a requirement for 7(a) lenders and CDCs to obtain written borrower consent to use information obtained on tax transcripts. This requirement will impact all lending businesses, regardless of whether the loan is for the SBA. It is recommended that (7)a lenders and CDCs contact their legal counsel for guidance on how to comply.
NAFCU works closely with the SBA to expand access to credit union small-dollar loans for small businesses across the nation. NAFCU and the SBA in September signed a new Strategic Alliance Memorandum (SAM) to strengthen their partnership.