Industry Insights
SBA SOP 50 10 8 – Video 4 – Removal of “Do What You Do” Philosophy
April 30, 2025
Video #4: Removal of “Do What You Do” Philosophy
What was “Do what you Do” supposed to be?
A common complaint with SBA lending was the overall complexity and procedural burden involved in the SBA process
- Reduce regulatory/procedural burden on SBA lenders
- Simplified underwriting and origination processes for lenders
- Lenders could align their SBA process with their conventional process
What did “Do what you do” actually create?
- It streamlined loan processing, but it also led to concerns around rising defaults due to inconsistent underwriting
- Created frustrations with many lenders who were seeking more prescriptive guidance that was no longer present in SOP
“Do what you do” is gone, now what?
- First of all, there are still a couple of places that Lenders need to reference their non-SBA lending practices. One example is for 7(a) small loans when it comes to Life Insurance requirements and collateral guidelines (especially when it comes to requiring a personal residence)
- More prescriptive guidance will lead to more consistent loan quality, which will safeguard the 7(a) program.
- SOP is a minimum standard.
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