U.S. SBA doubles combined 7(a) and 504 loan limit for small businesses

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SBA doubles loan limits

Highlights

The U.S. SBA increased the combined borrowing limit for 7(a) and 504 loans from $5 million to $10 million for eligible small businesses.
The rule separates 7(a) and 504 loan balances, enhancing financing flexibility for capital-intensive sectors like construction, logistics, energy, and food production.
SBA supports manufacturing and supply chain growth by waiving loan fees for manufacturing NAICS codes, launching manufacturer-specific loan programs, and introducing new 90% guarantee products.

Loan rule expands financing capacity

As announced by the U.S. Small Business Administration, the new rule raises the cumulative limit on combined 7(a) and 504 borrowing from $5 million to $10 million for eligible small businesses. Borrowers that secure a 7(a) loan first can access up to $5 million under that program and up to another $5 million through the 504 program.

The agency says the change decouples 7(a) loan balances from the 504 program, giving capital-intensive businesses more room to combine long-term financing for real estate and equipment with working capital for operations and expansion. Sectors cited by the SBA include construction, logistics, energy, food production and related industries.

Small manufacturers, which can already obtain multiple 504 loans when each loan supports a separate project, will also be able to apply for up to $5 million through the 7(a) program. The SBA says that increases flexibility for companies seeking to expand production, add staff and respond to stronger domestic demand.

Manufacturing and policy focus

The rule fits into a broader SBA push to channel more capital toward manufacturing, agriculture, housing, energy and transportation. The agency says it has already waived loan fees this year for manufacturing NAICS codes, created a loan program dedicated to American manufacturers, and introduced new 90% guarantee programs for manufacturers and for small businesses in the grocery supply chain.

SBA Administrator Kelly Loeffler says the change is intended to support businesses that are in growth mode and need funding to hire, expand and increase output. The agency also continues to promote its asset-based 7(a) Working Capital Pilot Program, which can provide homebuilders with project-based lines of credit of up to $5 million.

Our earlier report on Congress’ highway funding plan covered a bipartisan proposal to introduce annual fees for electric vehicles and certain plug-in hybrids to help pay for road repairs. The measure was framed as a way to offset weakening gas- and diesel-tax receipts as EV adoption rises, alongside work on a five-year highway reauthorization package expected to top $500 billion.

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