How the new SBA SOP is setting up bigger 504 deals

As of October 1, 2026, SBA is operating under an updated SOP, industry shorthand for its Standard Operating Procedure, or rulebook of lending rules. Read alongside a separate policy change from this summer, it's clear SBA is setting the stage for larger, more complex deals. RBAC has a long track record of structuring 504 financing into the tens of millions alongside our bank partners, and while we’ll always welcome 504 deals of any size, we see these changes as good news, and we're ready to help you navigate what they mean for your clients. Here's what's changing, and what it means for the deals you're sending our way.

Businesses can now borrow more in total SBA loans

On July 4, ahead of this SOP, SBA doubled the maximum combined 7(a) and 504 borrowing limit to $10 million. A borrower who secures a 7(a) loan first can now access up to $5 million through 7(a) and up to $5.5 million through 504, for a combined $10.5 million. Order matters, though: when a new 7(a) and a 504 are part of the same deal, the 7(a) loan needs to be approved first to unlock the full amount. Existing 7(a) loans work differently. A 7(a) loan your client already has on the books no longer counts against their 504 exposure, so it has no bearing on a new 504 application. We're glad to walk you and your clients through what that sequencing looks like for their specific deal.

Bigger 504 projects now need more documentation

Bigger deals bring bigger risk, so it's no surprise SBA wants more from lenders in return. For 504 projects of $5 million or more, SBA now requires an underwriting analysis from the third-party lender on the deal, something that was never required before. 

The exact way that this will be implemented isn't fully settled — some conversations point to just the financial analysis portion being required rather than the full memo, and there's talk of a future technology update that would let third-party lenders submit directly to SBA. We're closely tracking this change and will discuss the specifics required for individual deals. In the meantime, know that this documentation ask is coming from SBA, not from RBAC.

504's DSCR requirement was raised

In a similar move to mitigate risk on potentially larger deals, 504's debt service coverage ratio (DSCR) floor was increased from 1.10x to 1.15x in this SOP update, with new flexibility to average the last two fiscal years instead of relying on the most recent one alone, so a single soft year no longer has to sink a deal if the prior year was stronger. However, there’s a nuance to keep closely on your radar — on an acquisition deal that pairs a 7(a) for the business with a 504 for the real estate, the more conservative of the two ratios governs the whole transaction, and the 7(a) acquisition floor is set higher, at 1.25x. 

Bigger deals aren't new to us

At RBAC, we think SBA’s signals toward larger transactions will only enhance our ability to serve a greater range of businesses with 504 loans. We already have a track record of doing exactly that. We can structure SBA 504 loans up to $5.5 million, and by pairing our 504 financing with a bank's participation, we've helped bring multiple projects worth tens of millions to life.

Details will sharpen as the SOP takes effect

This SOP is live as of today, but that doesn't mean every detail is settled. Credit memo documentation in particular will likely come into focus as lenders start working real files under the new rules, and we'll keep you posted as it does.

Remember — you don't need to memorize the rulebook. Reading it, and keeping up with every change to it, is our job as 504 lending experts. These highlights are simply helpful to keep in mind for the next time we're talking through a deal together. When you're ready with your next deal, we're always one call away at 609-587-1133 or info@rbacloan.com.