Best Practices: What’s Ahead for SBA Lending in 2026

Following its “do what you do” policy era, the U.S. Small Business Administration (SBA) has issued various procedural notices, underwriting updates, and eligibility revisions in the past few months, re-establishing certain prudent lending standards and revising applicant eligibility for SBA loan programs. As lenders, borrowers, and other key partners adjust to the recent changes, which will ultimately impact the SBA loan closing process, SBA continues to seek input on ways SBA loan programs can be improved to bolster access to capital and what policies should be considered for the next iteration of SBA’s Standard Operating Procedure (SOP) 50 10. Most recently, SBA officials had a conversation with participants at the NAGGL spring conference, which elicited a lively discussion.

Here’s a look at some hot topics that may be addressed in a new SOP 50 10:

• Enhanced credit diligence requirements particularly with financial statements, bank statements, detailed explanations for projections
• Evaluation of the minimum debt-service-coverage ratio for certain loan types
• Revisions to the minimum required equity injection depending on the transaction type (i.e. partner buyout versus complete change in ownership)
• Guidance on sources of injection (i.e. investors, seller financing, other non-owner sources)
• Clarification on debt refinancing requirements surrounding maturity of the new loan, refinancing existing 7a debt
• Potential consideration given to pledged collateral as part of the credit analysis
• Updates to EPC/OC rules and requirements
• Documentation requirements for rollovers as business start-ups (ROBS) and expectations of lenders in servicing such loans
• Streamlined application processes and technology improvements by SBA

The above list is not intended to be definitive or exhaustive, and SBA will ultimately decide what rules may change or remain the same. Participants in SBA loan programs should use this opportunity to let SBA know which policies could be clarified or changed. SBA has not provided a firm timeline on issuance of a new SOP 50 10, however, it is in process and SBA is actively seeking lender feedback. Navigating these regulatory updates smoothly often requires the insight of an experienced SBA attorney. For SBA compliance matters, visit us at www.starfieldsmith.com.