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.
Buy it all, or don’t buy with SBA money. The same rules require an SBA-financed change of ownership to move to 100% ownership — partial buyouts of a partner no longer qualify, and any seller keeping a stake must guarantee the loan for two years.
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