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SBA Loan Program Alteration Updates

Some of the latest updates to lending features for the 504 and 7(a) loan programs are now underway with changes that decrease challenges for loan seekers and open up accessibility.  The shifts include specific changes that will benefit various aspects of SBA loan approvals due to their simplifying loan access which is focused on allowing even more opportunities for business owners to thrive and improve job creation each year.

7(a) loans are a commonly sought after option for small businesses that have found locating funding to be a challenge when turning to other potential lenders, thus changes to simplify the loan process are in favor of supporting small business development.  504 loans are valuable in another way as they support expansion projects that small businesses need to complete to establish themselves either through acquiring land on which to build, structures to run their business in, or updating and modifying their existing location or facilities.

The proposed changes include specific adjustments, such as increasing the liability that Certified Development Companies’ board of directors share in the dispersal of 504 loans to small businesses.  This is meant to ensure the integrity of the program is bolstered even further through reassessing oversight procedures of the program.

By removing certain aspects of the loan applications process, the adjustments to these two programs also include abolishing the personal resource test, which means collateral requirements are shifting to expand opportunities for viable applicants and reduce complexities.  Similarly the removal of the nine month rule pertaining to the 504 loan which limited the number of months during which business owners could seek funding for project expenses to nine months is now expanded without limit so that loans may be sought for expenses regardless of when they were incurred.

Finally, the SBA loan program changes have lifted certain aspects of the rules of affiliation that would have previously prevented certain businesses from qualifying for SBA programs due to their connection with other businesses.  Thus the ways in which businesses qualify for these SBA loan opportunities has been updated to allow greater access and simpler proceedings.

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