On May 18, the SBA announced a new rule, effective July 4, that doubles the cumulative loan limit for its 7(a) and 504 programs from $5 million to $10 million in combined SBA-backed financing. Under the new policy, qualified borrowers who secure a 7(a) loan first may access up to $5 million through the 7(a) program and up to $5 million through the 504 program. The rule also decouples 7(a) loan balances from the 504 program, giving capital-intensive small businesses, including those in construction, logistics, energy and food production, greater flexibility to pair long-term financing for real estate and equipment with working capital for operations and expansion. Small manufacturers, who can currently obtain an unlimited number of 504 loans tied to distinct projects, will also be able to apply for $5 million through the 7(a) program.

The 7(a) program is the SBA’s flagship lending program, offering government-guaranteed loans for equipment purchases, real estate acquisition, working capital, and business expansion, while the 504 program provides long-term, fixed-rate financing for major fixed assets through certified development companies. The SBA described the change as raising its maximum financing offering to the highest level in agency history.