SBA 7(a) COMPLIANCE

The Searcher's Guide to
SBA 7(a) Technical Compliance

How to prevent "Tech Debt" from killing your DSCR and PLP approval.

SECTION 01

The Hidden Rule (SOP 50 10 7.1)

Most searchers know the SBA requires a Business Valuation. Few know about the "Useful Life" mandate.

The Trap

If you buy a SaaS company with a 10-year loan term, but the tech stack (e.g., AngularJS) goes End-of-Life in 3 years, you are technically insolvent. The SBA manual (SOP 50 10) requires the loan maturity to match the asset's useful life.

The Vigilcap Solution

We provide the "Remaining Useful Life" (RUL) certificate. If we prove the code is modern (React/Python 3), you justify the full 10-year amortization, lowering your monthly payments.

SECTION 02

Justifying the "Repair Escrow"

When you find "Spaghetti Code" during diligence, don't just walk away. Use it.

Lenders are allowed to finance "Improvements" under the 7(a) program.

  1. 1 Quantify: Use our report to put a dollar figure on the fix (e.g., "$150k to fix the database").
  2. 2 Escrow: Ask your lender to hold back that $150k from the purchase price into a "Repair Escrow."
  3. 3 Result: You get the cash to fix the code tax-free, and the bank gets a safer asset.
SECTION 03

Protecting the Personal Guarantee

You are signing a Personal Guarantee. If the servers crash and customers leave, the bank takes your house.

Financial Diligence (QofE) looks at the past.
Technical Diligence looks at the future.

Don't sign a PG on a "Black Box."

Ready to Protect Your SBA Loan?

Get a bank-grade Technical Due Diligence report in 24 hours.

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⚠️ LEGAL DISCLAIMER: NOT FINANCIAL ADVICE

Vigilcap Risk Analytics ("Vigilcap") is an independent technical due diligence provider and is not affiliated with, endorsed by, or an agent of the U.S. Small Business Administration (SBA).

The information provided in this guide is for educational and informational purposes only. It does not constitute financial, legal, lending, or tax advice. While Vigilcap strives to align its methodologies with SBA SOP 50 10 7.1 "Prudent Lending" standards, we do not guarantee loan approval, specific interest rates, or eligibility for any government program. All underwriting and credit decisions are made solely by the Lender and the SBA.

Users should consult with a qualified CPA, attorney, or SBA-approved lender before making any financial decisions.