When a business owner proposes to capitalize a borrowing entity (in whole or in part) with the proceeds of a 401(k) rollover, the proposed SBA loan must be submitted for standard processing. Pursuant to SOP 50 10 5(K), Page 28, SBA loans made to an ESOP or 401(k) are not eligible under PLP processing.

As Your SBA Legal Department®, we strive to keep our clients well-informed with respect to SBA loan requirements and lender responsibilities. If you have any questions, please reach out to us at SBAQuestions@JellumLaw.com.