SBA Increases Size Standards 2024
What You Need To Know
The United States Small Business Administration (SBA) has increased the sizes of small businesses that can be eligible for their key loan programs, effective March 18, 2024. This Final Rule, published in the Federal Register, aims to broaden eligibility for the SBA 504 and 7(a) loan programs, potentially opening doors for more small businesses to access crucial funding.
Under the updated standards:
- Tangible Net Worth threshold has been raised to $20 million from the previous $15 million.
- Average Net Income after Federal Income Taxes for the two full fiscal years before the SBA application date has increased to $6.5 million from $5 million.
These adjustments, amounting to a 34.46% increase to accommodate inflation since 2010, mark a significant shift towards inclusivity and accessibility in small business lending. The SBA’s changes allow CDC Small Business Finance to increase the number of borrowers eligible for our programs, and further advance our dedication to supporting small businesses.
Susan Lamping, VP of Sales, Small Business Loans, highlights the importance of these changes: “The updated SBA size standards empower SBA lenders to extend loans to businesses that might still qualify as small, even if they have an affiliate business that exceeds the previous size standard requirements. This expansion broadens lending opportunities for a greater number of businesses.”
“This is fantastic news for growing businesses!” adds Andrew Mort, SBA 504 & CRE Manager. “The SBA’s decision to permanently increase the size standards for their loan programs opens the door to a wider range of companies, including those historically marginalized, who now have access to the affordable financing they need to secure owner-user real estate and equipment for their business growth. This adjustment ensures that more businesses, regardless of their background or location, can buy their business property and remain in their communities providing economic benefits to their employees and the local residents. CDC Small Business Finance is excited to be able to help more clients, particularly those from underserved communities, get access to needed funding through the SBA 504 loan program.”
As the SBA continues to monitor economic trends and adjust size standards accordingly, small businesses can anticipate ongoing support and opportunities for growth. CDC Small Business Finance is always on top of the latest changes and takes a proactive approach to fostering a more vibrant and resilient small business ecosystem, driving economic prosperity, and community development.
