On August 14, 2026, SBA issued Information Notice 5000-880695, announcing the new SOP 50 10 8.1, which becomes effective October 1, 2026. The new SOP incorporates Policy and Procedural Notices issued since SOP 50 10 8 and introduces significant changes to the 7(a) loan program rules governing equity injections, change of ownership transactions, debt refinancing, and other areas. This article focuses on the new maturity limitations applicable to change of ownership and mixed purpose loans that also finance commercial real estate.

Prior Real Estate Loan Maturity Framework Under SOP 50 10 8

Under SOP 50 10 8, when loan proceeds were used for multiple purposes or to finance a change of ownership, the Lender could apply a 25-year maturity to the entire loan if at least 51% of the proceeds were used to acquire, refinance, or improve commercial real estate. For example, a Borrower acquiring a business for $5 million, with $3 million allocated to the real estate and $2 million allocated to the operating business, could generally receive a 25-year term for the entire $5 million loan. SOP 50 10 8.1 eliminates this structure.

Lenders should note that SOP 50 10 8.1 applies to loan applications that receive an SBA loan number on or after October 1, 2026. Accordingly, applications that receive an SBA loan number before October 1, 2026, remain governed by SOP 50 10 8, including the prior 51% rule.

The prior 51% rule often made business acquisitions including real estate more affordable by allowing the business acquisition portion of the loan to be amortized over 25 years, rather than the 10-year maximum that would apply if no real estate were included. The longer term reduced the Borrower’s monthly loan payment and improved the debt service coverage. For Borrowers whose cash flow was close to SBA’s or the Lender’s minimum debt service coverage ratio, the longer maturity could enable the Borrower to qualify for SBA financing. It also allowed Lenders to make larger loans and combine multiple uses of proceeds into a single transaction. Accordingly, loan maturity was often a material component of both the Lender’s credit analysis and the Borrower’s acquisition structure. 

New Rule: Separate or Blended Maturities

The new SOP directs mixed purpose loans and all change of ownership loans to the maturity requirements in the new Appendix 15. Under Appendix 15, a mixed purpose loan or change of ownership loan that includes commercial real estate must be structured as either two separate loans or one loan with a blended maturity. See SOP 50 10 8.1 page 350.

Using the business acquisition example above, the structure using separate loans would consist of a $3 million real estate loan with a maturity of up to 25 years and a $2 million business acquisition loan with a maximum maturity of 10 years.

Alternatively, the Lender may use one loan with a weighted average maturity. Because 60% of the $5 million loan is allocated to real estate and 40% is allocated to the business acquisition, the blended maturity is calculated as follows: (60% × 25 years) + (40% × 10 years). The resulting  blended maturity for the $5 million loan is 19 years.

Using either permitted structure in this example increases the Borrower’s monthly debt service compared with the prior 25-year structure. The blended loan produces a lower monthly payment than the structure using two loans, while separate loans allow each use of proceeds to retain its independently permitted maturity. Lenders should assess both options early in the underwriting process, particularly for transactions with limited debt service coverage, and work with the Borrower to select the structure that best balances the Borrower’s cash flow needs with the Lender’s credit standards.

Stay tuned to Starfield & Smith for additional updates on SOP 50 10 8.1. For more information about these and other significant program changes, contact the SBA compliance attorneys at Starfield & Smith at 215-542-7070 or info@starfieldsmith.com