Small Business Administration
Note: On January 20, 2025, President Trump issued a memorandum instituting a regulatory freeze, preventing agencies from issuing proposals or rules pending review by Trump-appointed agency heads. On January 31, 2025, President Trump issued Executive Order 14192, directing agencies to identify 10 existing regulations to eliminate for each new regulation they promulgate.
Disaster Loan Program
The Small Business Administration’s (SBA) Disaster Loan Program provides direct assistance to homeowners, renters, businesses, and nonprofits to assist with rebuilding communities after a disaster. Pursuant to section 7(b) of the Small Business Act, 15 U.S.C. § 636(b), SBA is authorized to make direct loans to homeowners, renters, businesses, and non-profit organizations that have been adversely affected by a disaster. The Act authorizes the SBA Administrator to increase size limits on unsecured disaster loans for physical damages in Major Disasters and for Economic Injury Disaster Loans (EIDL) for all disaster declarations except Military Reservist Economic Injury Disaster Loans (MREIDL). (See 15 U.S.C. 636(d)(6)). SBA is further authorized to set a low-interest rate for individuals and businesses that SBA determines are unable to obtain credit elsewhere and to set a market interest rate for individuals and businesses that can obtain credit elsewhere.
On July 24, 2024, the SBA issued a direct final rule that amends the regulations governing the Disaster Loan Program. (89 Fed. Reg. 59826, July 24, 2024). This rule was issued in response to Executive Order 14030, which tasked SBA with developing recommendations for improving how Federal financial management and reporting can incorporate climate-related financial risk, especially as that risk relates to Federal lending programs.
Biden Administration (2021-2025)
Direct Final Rule Making Changes to Unsecured Loan Amounts and Credit Elsewhere Criteria
On July 24, 2024, the SBA issued a direct final rule that amends the regulations governing the Disaster Loan Program. (89 Fed. Reg. 59826, July 24, 2024). Specifically, the rule establishes new procedures for SBA to determine whether a loan applicant has access to credit elsewhere. Under the Small Business Act, SBA is required to determine whether a disaster survivor can access credit elsewhere by analyzing their cash flow and disposable assets. The rule indicates that SBA may base its determination on the credit score modeling, which adheres to that utilized by non-Federal sources.
The rule also increased the unsecured threshold for physical damage loans under Major Disaster declarations and for Economic Injury Disaster Loans (EIDL) under all disaster declarations. SBA increased the unsecured loan threshold from $25,000 to $50,000 for EIDL loans for all disasters and for physical home and business loans for Major Disaster declarations.
This rule was issued in response to Executive Order 14030, which tasked SBA with developing recommendations for improving how Federal financial management and reporting can incorporate climate-related financial risk, especially as that risk relates to Federal lending programs.
Changes to Maximum Loan Amounts and Miscellaneous Updates
On June 16, 2023, the SBA issued a direct final rule amending the regulations governing SBA’s Disaster Loan Program (88 Fed. Reg. 39335, June 16, 2023). The amendments increase the home loan lending limits and make other changes designed to increase disaster survivors’ access to loan funds for the repair or replacement of a damaged property. SBA concluded that the changes are “overdue and necessary due to increased costs related to construction and labor, as well as increases in property valuations that have occurred over time.”
Since the rule was issued as a direct final rule, SBA did not issue an advanced notice of proposed rulemaking or a proposed rule before finalizing the rule.
First Trump Administration (2017-2021)
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Green Lender Initiative
Section 7(a) of the Small Business Act, 15 U.S.C. 636(a), authorizes the SBA “to make loans . . . to any qualified small business concern.” Loans may be made directly by SBA or in cooperation with banks or other financial institutions. Under section 7(a)(17) of the Small Business Act, the SBA “shall authorize lending institutions and other entities, in addition to banks, to make loans authorized” under section 7(a). Pursuant to this section, SBA has authorized Small Business Lending Companies (SBLCs) to participate in the 7(a) Loan Program. An SBLC, as defined in 13 CFR 120.10, is a non-depository lending institution authorized by SBA to make loans pursuant to section 7(a) of the Small Business Act and loans to Intermediaries in SBA's Microloan program. Additionally, SBA has authorized Community Advantage (CA) SBLCs to receive licenses to provide mission-oriented lenders, primarily nonprofit financial intermediaries focused on economic development, access to 7(a) loans.
On July 22, 2024, the SBA announced its new “Green Lender Initiative,” designed to enroll additional climate lenders in SBA’s loan programs.
On July 22, 2024, the SBA announced its new “Green Lender Initiative,” designed to enroll additional climate lenders in SBA’s loan programs. On August 9, 2024, the SBA’s Office of Capital Access (OCA) invited applications for new Small Business Lending Company (SBLC) licenses from September 2, 2024, to October 15, 2024, and shared the process by which interested entities may apply. (89 Fed. Reg. 65174, Aug. 9, 2024). SBA similarly invited applications for Community Advantage SBLCs (CA SBLCs) from September 2, 2024, to December 20, 2024. SBA will award up to three new SBLC licenses and an indefinite number of new CA SBLC licenses.
Biden Administration (2021-2025)
Notice of SBA Launches “Green Lender Initiative” and Accepting Application Periods for SBLC Licenses
On July 22, 2024, the SBA announced its new “Green Lender Initiative,” designed to enroll additional climate lenders in SBA’s loan programs. On August 9, 2024, the SBA’s Office of Capital Access (OCA) invited applications for new Small Business Lending Company (SBLC) licenses from September 2, 2024, to October 15, 2024, and shared the process by which interested entities may apply. (89 Fed. Reg. 65174, Aug. 9, 2024). SBA similarly invited applications for Community Advantage SBLCs (CA SBLCs) from September 2, 2024, to December 20, 2024. SBA will award up to three new SBLC licenses and an indefinite number of new CA SBLC licenses.
Final Rule on Lender Licensing
On April 12, 2023, SBA published the Final Rule on Small Business Lending Company (SBLC) Moratorium Rescission and Removal of the Requirement for a Loan Authorization (88 FR 21890, effective May 12, 2023). Through that rule, SBA lifted the self-imposed moratorium on licensing new SBLCs and established the plan to approve three SBLCs in the first year following adoption of the rule. The rule also added a new type of lending entity, CA SBLCs, for loan authorization in the 7(a) and 504 Loan Programs.
Trump Administration (2017-2021)
N/A
Section 504 Program Lending for Clean Energy Projects
The 504 Loan Program is an SBA financing program authorized under title V of the Small Business Investment Act of 1958, 15 U.S.C. 695 et seq. The primary goal of the 504 Loan Program is to provide long-term financing to small businesses for the purchase or improvement of land, buildings, and major equipment, to facilitate the creation or retention of jobs and local economic development. Under the 504 Loan Program, loans are made to small business applicants by Certified Development Companies (“CDCs”), which are regulated by SBA. Clean energy and energy efficiency investments are eligible for 504 loans.
On April 30, 2024, the SBA circulated a procedural notice removing the $16,500,000 cap on lending under the SBA 504 Loan Program for Energy Public Policy projects, which includes renewable energy projects and energy efficiency projects. (SBA Procedural Notice No. 5000-856984). Previously, small businesses financing “energy public policy projects” were limited to three SBA 504 loans of $5.5 million each, for a maximum total of $16.5 million. The SBA removed the limit on the number of 504 loans borrowers can secure. The maximum amount of each loan will continue to be capped at $5.5 million, however.
Biden Administration (2021-2025)
Procedural Notice Announcing Removal of Cap on Funding for Clean Energy Projects
On April 30, 2024, the SBA circulated a procedural notice revising provisions of SOP 50 10.7 related to the 504 Loan Program (SBA Procedural Notice No. 5000-856984). In particular, the SBA removed the $16,500,000 cap on lending for Energy Public Policy projects, which includes renewable energy projects and energy efficiency projects. Previously, small businesses financing “energy public policy projects” were limited to three SBA 504 loans of $5.5 million each, for a maximum total of $16.5 million. The SBA removed the limit on the number of 504 loans borrowers can secure. The maximum amount of each loan will continue to be capped at $5.5 million, however. Going forward, borrowers may secure as many 504 loans, each up to $5.5 million. for which they otherwise qualify. Energy public policy projects include those that reduce energy consumption (e.g., retrofits) and renewable energy projects (e.g., adding solar), etc.
First Trump Administration (2017-2021)
N/A