The SBA recently announced some policy/program changes that could be helpful, if you are looking for capital.
If you are looking for capital, or a broker that helps small businesses get access to capital, these changes could really come in handy.
Make sure you understand them, or work with someone who does.
By the way, be sure to check out the end of this post for ways to improve your SBA loan application status.
My SBA experience
At the last bank I joined, I took over as Chief Lending Officer and was asked to launch and build out their small business lending program.
I started by targeting my portfolio of small business clients that had worked with me at previous banks.
We quickly built a name for being a small business friendly lender. So much so that in no time we were getting loan requests larger than we were willing to finance on our own.
We did that by offering two new programs that the bank hadn’t offered before.
The first was a first-of-its-kinds venture debt program we called the Line12 Fund. The fund gave small dollar loans, of less than $50,000, to ideation-stage entrepreneurs.
Second, we launched a Small Business Administration loan program. There we leveraged my past experience with SBA loans. The first year, and every year thereafter, we were the top SBA lender in our state.
The purpose of SBA loans
The SBA guarantees loans that approved vendors make to small businesses. The guarantee is intended to encourage the lender to make loans that are in the gray. Meaning they aren’t easy to approve, but they aren’t bad loans either.
There are two additional benefits that come with a SBA guarantee. First, the lender can offer an extended term for the loan, since the main program, the 7(a), allows loan terms to go up to ten years. The other benefit is that lenders can offer a higher loan-to-value, meaning the borrower can inject less cash into the deal.
The SBA MARC program
Occasionally, the SBA, which is a federal agency, will offer specific loan programs targeting types of loans, e.g. export capital, and/or industries.
Recently the SBA launched the MARC, or Manufacturers’ Access to Revolving Credit, program.
New Loan Program: Manufacturers' Access to Revolving Credit (MARC)
- Working Capital Focus: Effective October 1, 2025, the SBA launched the MARC Loan Program. This new loan is a part of the 7(a) loan program and is specifically designed to provide flexible working capital for small manufacturers.
- Loan Structure and Amount: MARC loans can be structured as either a revolving line of credit or a term loan, with a maximum amount of $5 million. The revolving portion can have a maturity of up to 20 years (10 years revolving, 10 years term), while a term loan can have a maturity of up to 10 years.
- Permitted Uses: Funds can be used for short-term working capital needs, such as inventory purchases or new projects.
- Restrictions: MARC loans cannot be used for non-working capital debt refinancing, changes of ownership (though they can be used for working capital needs at the same time as a change of ownership), paying delinquent withholding taxes, or floor plan financing.
- Guaranty: The SBA will guarantee 85% of MARC loans up to $150,000 and 75% for loans greater than $150,000.
Fee Waivers for Manufacturers
- 7(a) and 504 Loans: The SBA has waived fees on its flagship 7(a) and 504 loan programs specifically for manufacturers. This change, also effective October 1, 2025, is a major initiative to lower the cost of capital.
- 7(a) Loan Waivers: For 7(a) loans to manufacturers of $950,000 or less, the upfront SBA fee is waived.
- 504 Loan Waivers: For 504 loans to manufacturers (including refinancing), both the upfront SBA Guaranty Fee and the annual SBA Servicing Fee are set at 0%.
Broader Policy and Underwriting Changes
In addition to the manufacturer-specific programs, the SBA has made other notable changes that affect all loan applicants, including manufacturers, effective June 1, 2025:
- Stricter Underwriting: The SBA has reinstated stricter lending criteria to "restore" previous standards and address a negative cash flow in the 7(a) program in fiscal year 2024.
- Collateral Requirements: The threshold for requiring collateral has been lowered from $500,000 to $50,000, meaning collateral will be required for almost all loans.
- Equity Injection: Equity injection requirements are now 10% of project costs for start-up businesses and changes of ownership.
- Credit Scores: The minimum business credit score has increased from 155 to 165.
- Citizenship and Residency: Loans are now restricted to businesses where all owners, guarantors, and key employees are U.S. citizens, nationals, or lawful permanent residents. This is a change from the previous policy that required 51% ownership by these individuals.
- Personal Resources Test: The SBA has reinstated a limited personal resources test, requiring lenders to verify if an owner has liquid assets (excluding retirement, college, and medical savings) that could be used instead of a loan.
I have two resources you should take a look at if you, or someone you know, are considering an SBA loan.