SBA Lending Update on 5/18/2026

Great news came out of the SBA today. The SBA announcement was titled "SBA Doubles Cumulative 7A and 504 Loan Limit to $10 Million". This is such great news because it expands access to capital under the SBA loan programs. However, there are a few things to understand with this announcement. First, the actual limits under the SBA 7A program is still $5 million and under each project for the SBA 504 program the limit is still $5 million in general with a few exceptions. So it does not mean you can now do SBA 7A loans above $5 million. However, there are many ways you can benefit from this change in the rule, which are outlined below. Before reading these benefits, please note that the file language of the ruling has not been released yet, so there could be some nuances we are not yet aware of at this time. 1) If you have an SBA 7A loan already maxed at $5 million, you will now have availability to secure an SBA 504 loan for your business. Previously the only businesses that had access to additional financing via the SBA 504 loan program were manufacturing companies. Now any company will have access to the $5 million available under the SBA 504 program even if they have maxed out their SBA 7A loan exposure. 2) Previously if you already had $5 million in SBA 504 loan exposure you were exempted from securing an SBA 7A loan. Now even if you already have SBA 504 exposure you can qualify for up to an additional $5 million in financing via the SBA 7A loan program. 3) According to the language in the announcement, "Under the new policy, qualified borrowers who secure a 7(a) loan first may access up to $5 million through the 7(a) loan program and up to $5 million through the 504 loan program, for a combined total of $10 million in SBA-backed financing." This language does not make it clear if there will be any sort of delays in when you can secure the additional financing from the SBA 504 and in what cases you need to start with one program over the other. The assumption is that you will be able to secure both an SBA 7A and SBA 504 loan for a project together at the same time. 4) For those not aware, the SBA 504 program can only be used for equipment financing (excluding vehicles) and 51% or more owner-occupied commercial properties. You cannot use an SBA 504 loan for inventory, A/R, working capital, or business acquisitions. If an SBA 7A and SBA 504 loan can be closed at the same time, in theory you could use the SBA 7A loan for the business purchase and the SBA 504 loan for the real estate and equipment purchase, and get debt above $5 million for your business acquisition. Please note the SBA will lend on the appraised value of equipment, so the equipment would need to value out to support the portion of the debt going towards equipment. 5) Historically the SBA 504 loan program when used to buy real estate at the same time there is a change of ownership in the business requires a 15% down payment instead of the 10% down payment usually required under normal circumstances. It is not clear if the SBA is going to revise this rule with their update, but at the moment based on how the SBA Standard Operating Procedure ("SOP") reads, today you would need 15% down if you used an SBA 504 loan for the business or equipment if closed at the same time you did a business acquisition. 5) If you already own your own business and have maxed out your SBA 7A financing, and you wish to buy the real estate, you can now use the SBA 504 program to fund the real estate purchase. The SBA 504 loan program is different then the SBA 7A loan program. Under the SBA 7A loan program, every dollar you borrow counts against your $5 million SBA guarantee limit. However, under the SBA 504 program you end up with two loans. One loan that is the SBA 504 loan for 40% of the purchase price for the real estate and / or equipment and a second loan that is a Bank conventional loan that is for 50% of the purchase price for the real estate and / or equipment. Only the 40% SBA 504 loan counts against your guarantee limit of $5 million for the SBA 504 loan program. This would allow you to complete an acquisition of real estate and equipment of up to $12.5 million and still stay within the parameters of the SBA 504 loan program as the traditional bank loan would carry the rest of the debt. So with the SBA 504 loan program you can leverage up substantially more total debt. In addition, if the conventional bank is willing to do a higher bank loan then you could use a lower SBA 504 loan and complete an even larger total project. 6) If you own a small manufacturer in NAICS Codes starting with 31, 32 or 33, you qualify for up to $5.5 million in SBA 504 financing. In addition, you can qualify for additional $5.5 million in SBA 504 exposure if a manufacturer in these NAICS codes every six months so long as the funds are going for new projects for that business. This could be acquiring additional real estate to expand into or purchasing equipment. This rules was already in place but I wanted to put fresh emphasis to it for those business owners that might already have SBA 7A exposure and now will have the SBA 504 availability they did not have before. As can be seen there are many great benefits available with this updated rule. It may not help every business owner get additional capital as the SBA 504 program only applies for owner-occupied real estate and equipment, but it will help many capital intensive businesses access substantial additional capital. If you have any questions about how these programs can work together, please do not hesitate to reach out to me at any time here or directly at redacted As additional updates come available we will let this community know. There is still a bill that passed the House of Representatives to increase the total available exposure for manufacturers to $10 million for both SBA 7A and SBA 504 loan programs. If that bill passes the Senate in the future, it would increase availability for manufacturers even further.