Best Practices: Recent Changes for the U.S. Small Business Administration

Every shift in administration brings changes to government programs, and the U.S. Small Business Administration (SBA) is no exception. This latest transition is no different, with several important announcements made just this past week regarding upcoming changes to the SBA and its 7(a) loan program, as well as broader adjustments to SBA operations.

On March 21, 2025, the U.S. Small Business Administration (SBA) made a significant announcement regarding plans to reorganize and reduce its workforce by 43%. This move is part of a broader wave of changes occurring under the current administration, signaling a shift in the way government agencies are structured and operate. While the specifics of where these cuts will occur remain unclear, the impact on the SBA’s day-to-day operations is something that businesses and lenders will need to closely monitor.

On the same day as the announcement was made that the SBA workforce will be reduced, President Trump also announced plans to move the $1.7 trillion dollar student loan portfolio from the Department of Education to the SBA.  We currently do not have any further details on how this transition will take place or how this will impact the operations of the SBA.

These announcements were followed by the issuance of SBA Information Notice 5000-865758 on March 24, 2025 (the “Notice”), in which the SBA announced that it will adjust 7(a) fees for the remainder of Fiscal Year 2025.  The Notice states it supersedes the prior information notice issued in July 2024, outlining the 7(a) fees for 2025.

Some of the highlights of the Notice include the reinstatement of the SBA Guaranty fee on any 7(a) loans that are in R1 status in E-Tran as of March 27, 2025, as more fully set forth in the notice.  SBA Express loans made to businesses owned by veterans, or the spouse of a veteran will continue to have an upfront guaranty fee of $0.

The Notice prohibits increases to any 7(a) loans that were made pursuant to the Economic Aid Act, and subject to a higher guaranty percentage.  The Notice also addresses the upfront fees due on Export Working Capital Lines and Working Capital Lines made under the SBA 7(a) loan program.

Lenders should remain vigilant and continue to closely monitor any official updates or releases from the SBA regarding policy changes and program adjustments. As the agency navigates these restructuring efforts, it is crucial for lenders to stay informed in order to ensure full compliance with the latest requirements and guidelines. By staying proactive and keeping up to date with SBA announcements, lenders can avoid potential pitfalls and continue to effectively serve their small business clients during this period of transition.  If you have questions pertaining to any notice issued by the SBA, feel free to contact Lyndsay Rowland at lrowland@starfieldsmith.com.