SBA Expands Key Loan Eligibility
Would Make It Easier To Get Funding
The U.S. Small Business Administration (SBA) has announced final plans to boost access to two government-guaranteed loan programs through a new rule set to take effect this month. The SBA has formally published changes that will eliminate or revise several requirements for its two main loan programs, the 7(a) and 504. The goal of the changes is to make it easier for small businesses to get SBA-backed funding, while also encouraging job creation.
“These enhancements will expand program eligibility and improve access to capital for small businesses,” said Ann Marie Mehlum, an associate administrator for the SBA. “Improvements in CDC corporate governance oversight will enhance program integrity and encourage more local involvement.”
Specifically, the changes nullify the so-called nine-month rule for 504 eligible project expenses, giving businesses more flexibility on spending. The revisions will also eliminate the personal resource test, adjust 504 collateral requirements, and improve CDC corporate governance.
The public comment period for the new rule ended last year. The final changes, currently published in the Federal Register, are set to take effect on April 21.