Good morning. If you’ve ever thought about buying the shop down the road, adding a yard, or financing a fleet, the ceiling on cheap, government-backed money just went up — a lot. Here’s what changed and the fine print that decides whether you qualify.
Top story — The SBA just doubled the cap to $10 million
On May 18 the Small Business Administration announced it’s doubling the cumulative 7(a) + 504 loan limit to $10 million per borrower, up from $5 million — the highest financing ceiling in the agency’s history, effective July 4, 2026. The mechanics matter: a qualified borrower who takes a 7(a) loan first can then access up to $5 million through 7(a) and up to $5 million through 504, stacked for a combined $10 million. The SBA specifically named construction among the capital-intensive industries this is meant to help — pairing long-term financing for real estate and equipment with working capital for operations. For a trades owner, that’s the difference between financing one location and financing an acquisition plus the building it sits in.
Quick hits
$10M combined, from July 4. The new rule lifts the cumulative 7(a)+504 cap from $5M to $10M per borrower — you go 7(a)-first, then layer 504 on top.
The down payment is still real. Under the SBA’s SOP 50 10 8 (effective June 1, 2025), a full change-of-ownership deal needs a 10% equity injection, and a seller note can cover at most half of that (5%) — and only if it’s on full standby for the loan term.
Buying in doesn’t have to mean buying it all. Under SOP 50 10 8 (effective June 1, 2025), a change of ownership that creates a new owner must reach 100% ownership — but a partial change of ownership among existing owners is expressly allowed, so long as at least one original owner remains an owner after the sale (SBA, SOP 50 10 8). Corrected 19 September 2026: an earlier version of this item said partial buyouts no longer qualified. That was wrong, and it was drawn from a secondary summary rather than the SOP itself.
The Tip — Get underwriting-ready before you chase the bigger loan
More borrowing room doesn’t help if a lender can’t underwrite you fast. This week, pull a clean trailing-12-month P&L and write down your add-backs (owner salary, one-off costs) so your real cash flow is obvious — lenders size these loans on debt-service coverage and global cash flow, not a gut feel. Then figure your true down payment: on a $1M acquisition, that 10% injection is $100,000, of which a seller note can carry at most $50,000. Know both numbers before you call a broker, so you’re negotiating from facts instead of hope.
Tool watch — [Not sponsored]
The SBA’s own Lender Match is a free tool that connects you with SBA-approved 7(a) and 504 lenders based on what you’re financing — a faster first step than cold-calling banks, and it costs nothing to see who bites. No one paid for this mention.
That’s the callout. See you next time.
The Callout — the business brief for the trades. We label every commercial placement: [Sponsor], [Affiliate], or [Not sponsored]. Today’s Tool watch is our own honest read — no one paid for it. 231J Ramparts Road, Te Anau 9600, New Zealand · Unsubscribe anytime.
Sources: SBA — Doubles Cumulative 7(a) and 504 Loan Limit to $10 Million, news release 26-52, 18 May 2026 · Starfield & Smith — Equity injection under SOP 50 10 8 · Whiteford — SBA Issues SOP 50 10 8: key changes impacting 7(a) lending · SBA — Lender Match · SBA — SOP 50 10 8, Lender and Development Company Loan Programs