SBA Doubles Cumulative 7(a) and 504 Loan Limit to $10 Million
Effective July 4, 2026, the U.S. Small Business Administration (SBA) clarified policy intended to expand the ability of the 504 and 7(a) loan programs to work together and provide additional flexibility to support of small business financing needs. Per the guidance (5000-879058):
- A 504 project may include multiple assets that are eligible be financed simultaneously.
- Outstanding 7(a) loans will no longer reduce the maximum SBA 504 debenture available to borrowers.
- While 7(a) loans will not count against 504 capacity, 504 loans will count against 7(a) capacity.
- For deals where the best fit is using both a 504 and 7(a) loan, the 7(a) loan must be approved first to ensure the borrower’s existing 7(a) exposure will not count against the borrower’s available 504 debenture capacity.
What This Means in Practice:
Borrowers benefit from pairing the right loan product to their needs, while lenders can mitigate risk and potentially be able to finance a broader range of opportunities.
EXAMPLE 1: For a borrower seeking capital for both real estate and production equipment, a CDC may structure those needs as separate concurrent 504 projects, with each eligible project potentially qualifying for up to the $5.5 million debenture limit.
EXAMPLE 2: A borrower obtains a $5 million 7(a) loan for working capital, inventory, and light equipment. The same borrower subsequently obtains a separate SBA 504 project for owner-occupied real estate. The 504 debenture may still be eligible for up to $5 million for standard projects, or $5.5 million for qualified manufacturers or eligible energy projects.
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