Don't Wait! SBA Loan Changes Are Coming – Transworld Business Advisors Can Help You Act Now!
Small business owners, take note! Significant changes to the Small Business Administration (SBA) loan programs are on the horizon, and these shifts could impact your ability to access crucial funding. Transworld Business Advisors is well aware of these shifting rules and is ready to help you understand your options and navigate the SBA loan application process now, before the stricter regulations take effect. If you're considering borrowing, now is the time to act quickly to secure funds under the current, more flexible guidelines.
Here's what you need to know and why you should consider applying for an SBA loan now:
Several key policy shifts are scheduled to take effect in the near future:
Stricter Underwriting is Returning (Effective June 1, 2025): Prepare for a more rigorous evaluation of your financials and business plan. The recent period of potentially more lenient underwriting is ending. Applying now means your application will be assessed under the existing standards.
Collateral Requirements Lowering (Effective June 1, 2025): While it sounds counterintuitive, the reduction of the collateral threshold to $50,000 means more loans will require you to pledge assets. If you can secure funding now for amounts up to $500,000 without mandatory collateral, it could be a significant advantage.
Equity Injection for Startups/Ownership Changes (Effective June 1, 2025): Soon, you'll generally need to contribute at least 10% equity for new ventures or ownership transitions. Applying now could allow you to leverage SBA funds without this mandatory upfront capital.
Small Loan Size Reducing (Effective June 1, 2025): The maximum for a 7(a) Small Loan is decreasing to $350,000. If you need funding between $350,000 and $500,000, you'll soon face the more complex process of a standard 7(a) loan.
Minimum Credit Score Increasing (Effective June 1, 2025): The minimum business credit score for small loans is going up. Don't let a potential score dip later prevent you from accessing funds now under the current, lower threshold.
Lender Responsibility for Eligibility (Effective June 1, 2025): While this impacts lenders directly, it could lead to more cautious and potentially slower processing of applications under the new rules. Get ahead of the curve by applying now.
Marijuana-Related Businesses Becoming Ineligible (Effective June 1, 2025): If your business has any connection to marijuana, hemp, or CBD, your window for SBA funding is closing soon.
Crucially, the tightened citizenship requirements for owners, guarantors, and key employees are already in effect as of March 7, 2025. If your business structure complies with the current rules but might not under the stricter upcoming regulations, acting now is even more critical.
The Bottom Line:
The SBA lending landscape is shifting. To potentially benefit from the current, and in some ways more accessible, loan requirements, it is highly recommended that you explore your SBA loan options and begin the application process as soon as possible, well before the June 1, 2025 effective date for the majority of these changes.
Don't miss this window of opportunity to secure the funding your small business needs under the existing guidelines. Contact Transworld Business Advisors today to leverage their expertise and take the first step before these significant changes take hold!
Justin Cotta Holmes, Transworld Business Advisors of Maine jholmes@tworld.com