Small businesses can now access up to $10 million in government-backed financing after the U.S. Small Business Administration changed its lending rules to allow qualified borrowers to combine its two flagship loan programs for the first time at their full limits.

The change, announced by SBA Administrator Kelly Loeffler and effective July 4, allows eligible businesses to obtain up to $5 million through the SBA’s 7(a) Loan Program and another $5 million through the 504 Loan Program, doubling the previous combined financing limit.

The policy change represents the largest financing expansion in the agency’s history and is designed to help growing businesses invest in facilities, equipment, working capital and expansion projects.

Under previous SBA rules, businesses were generally limited to $5 million in total borrowing across both programs.

For example, a company with an existing $3 million 7(a) loan could borrow only an additional $2 million through the 504 program.

The new policy removes that combined cap.

Qualified borrowers may now use the full financing available under each program simultaneously, creating access to as much as $10 million in total SBA-backed capital.

Although both loans remain separate and subject to individual underwriting requirements, the expanded flexibility allows businesses to finance larger growth projects while maintaining favorable government-backed lending terms.

Each program serves a different purpose.

The 7(a) Loan Program provides flexible financing that businesses can use for working capital, inventory, equipment purchases, real estate acquisitions, refinancing and general business expansion.

The 504 Loan Program, by contrast, focuses specifically on long-term investments such as owner-occupied commercial real estate, manufacturing facilities and major equipment purchases through Certified Development Companies.

Using both programs together allows businesses to finance real estate and fixed assets while preserving working capital for payroll, inventory and day-to-day operations.

Administrator Kelly Loeffler said SBA loan limits had remained unchanged for more than a decade despite significant increases in construction costs, equipment prices and business expansion needs.

She said the higher financing limits will help entrepreneurs create jobs, expand production and strengthen American manufacturing.

Manufacturers receive additional advantages under the revised policy.

Businesses in the manufacturing sector remain eligible for multiple 504 loans tied to separate expansion projects while also qualifying for the new $5 million 7(a) financing limit.

The SBA also announced temporary fee reductions through September 30 for certain manufacturing loans, including waived guaranty fees on qualifying 7(a) loans and reduced fees on eligible 504 financing.

The policy is expected to benefit capital-intensive industries including manufacturing, construction, logistics, food production and energy, where expansion projects often require significant investments in both facilities and operating capital.

Banks and Certified Development Companies are also expected to benefit from increased lending opportunities as more businesses qualify for larger government-backed financing packages.

Because SBA guarantees reduce lender risk, borrowers often receive more favorable interest rates and repayment terms than comparable conventional commercial loans.

Business owners should note that qualifying for the maximum financing remains subject to SBA eligibility requirements, lender underwriting standards, project qualifications and repayment capacity.

The new limits do not guarantee approval but significantly expand the financing available to eligible businesses.

For companies planning major expansion projects, the policy creates substantially greater access to affordable capital while allowing owners to keep more cash available for daily operations.

As interest rates remain elevated and commercial borrowing costs continue challenging many businesses, the expanded SBA lending authority provides entrepreneurs with one of the largest increases in federally backed financing opportunities in the agency’s history.

JBizNews Desk | Washington
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