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SBA 504 Lending Cap Reached

Capitol building in Washington, DC

For the first time ever, the SBA 504 loan program has reached its congressionally authorized cap for regular 504 loans. This applies to this fiscal year ending 9/30/2021.

What does this mean?

Seedcopa is authorized to continue submitting loan packages with no interruption. Loans approved by SBA will be designated “Approved Pending Funding,” and a loan number and authorization will be issued when funding is available at the start of the new fiscal year on 10/1/2021 (or sooner if Congress acts). This applies to all regular 504 loans, including 504 debt refinancing with expansion.

Good news: 504 debt refinancing without expansion can continue as usual. Loans will continue to be approved with loan numbers and authorizations issued. Recent major changes to 504 debt refinancing rules have made this option extremely attractive, and there is indeed funding for it. We highly recommend you continue to pursue this option.

How long will this last?

The lending cap is in place until Congress passes a new funding bill by the new fiscal year on 10/1/2021. If that doesn’t happen, an extension of last year’s funding budget is expected to be issued, but those funds will be in monthly increments that may not meet demand.

Seedcopa’s Sherwood Robbins is Region 3 Director of the National Association of Development Companies (NADCO), which warned of this lending cap earlier this summer and continues to advocate for any legislative fix that keeps the program operating normally. We’ll share further updates as they develop, including a deeper dive into the conditions that have led to this unprecedented situation. In the meantime, please do contact us to discuss any concerns.

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For almost forty years, Seedcopa + SeedcoDE has helped businesses get the money they need to start, grow and expand. We are proud that the loan programs we work with promote economic development.

Together with economic development partners throughout Pennsylvania and Delaware, we help to grow local businesses, create and retain jobs and stimulate local communities.

Our team has over 75 years of combined government lending experience and a dedication to excellent customer service. After our initial assessment of your project, our commitment is to get you approved and closed.

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