How do the borrower/lender request a subordination of SBA’s lien when needed for new financing?
Requests for subordination, which are currently taking about 5-7 business days to process due to volume, should be sent to firstname.lastname@example.org and include the following information:
- Borrower’s Name or Company Name
- SBA EIDL Loan Number or Application Number
- For the subordination document: Lender’s Name
- Lender’s Mailing Address
- Name of Lender’s Authorized Signer & Title
- Lender’s Contact Name and Email Address for That Contact
- The Proposed Loan Amount of the Loan Extended to the Borrower by Lender
The SBA PDC can follow up with verification of borrower's consent and any additional information needed, such as copies of the filed UCC(s).
SBA PDC will review and, once approved, the SBA PDC will prepare and execute a Subordination Agreement that subordinates the collateral security in the EIDL loan to the lien of the new lender and forward the signed document to the requestor and borrower.
This completed form is then e-mailed exclusively through Box.com to the borrower and lender, per SBA security policy for all electronic documents presented outside of the application portals. Some lenders are unable to access the Box.com links for electronic documents; in such cases, lenders should note that the documents are also provided to the borrowers in the same fashion and borrowers are able to freely share their personal documents to suit their businesses. Physical documents are mailed USPS.
Additional information is available on SBA's Economic Injury Disaster Loans webpage, Disaster Loan Applications webpage, and guidance on refinancing EIDLs with Paycheck Protection Program loan proceeds.