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Understanding the SBA SOP 50 10 8 Changes for Your Small Business Loan
Are you a small business owner or franchisee looking to fund your venture with an SBA loan? The new SBA Standard Operating Procedure effective June 1, 2025, introduces critical updates to the rules governing 7(a) loans, affecting eligibility, underwriting, and application processes. Let’s break down the key changes and show how LoanBox’s platform helps you navigate them to secure funding efficiently.
Navigating SBA Franchise Loan Eligibility in 2025
Are you a franchisee dreaming of launching or expanding your franchise with an SBA loan? The SBA’s updated rules, effective June 1, 2025, under SOP 50 10 8, introduce significant changes to franchise loan eligibility, reinstating the Franchise Directory, tightening ownership requirements, and enforcing stricter compliance standards. Let’s explore how the new rules affect your SBA loan eligibility.
No More Refinancing Merchant Loans With SBA Loans
Are you a small business owner or franchisee struggling with the crushing payments of a merchant cash advance (MCA)? You might be eyeing an SBA loan to refinance that high-cost debt and stabilize your finances. Unfortunately, the SBA’s rules, updated in SOP 50 10 8 (effective June 1, 2025), explicitly prohibit refinancing MCAs with SBA 7(a) or 504 loans. This restriction protects businesses from predatory debt cycles but ironically now prohibits SBA loans to help refinance out of predatory type lending.
Mastering the SBA Credit Elsewhere Test in 2025 with LoanBox
Are you a small business owner or franchisee aiming to fund your venture with an SBA loan? Whether you’re launching a new franchise or expanding a local retail shop, the Credit Elsewhere Test is a critical hurdle to secure SBA financing. This test ensures you genuinely need the SBA’s low-rate, long-term loans because you can’t obtain affordable financing elsewhere. The updated SBA SOP 50 10 8, effective June 1, 2025, makes this test more rigorous, demanding robust documentation and stricter underwriting.
Non-U.S. Citizens Ineligible for SBA Loans in 2025
The SBA’s updated SOP 50 10 8, Section B, Chapter 1, Paragraph B, introduces a strict ownership requirement, barring non-U.S. citizens from accessing 7(a) and 504 loans unless the business meets specific criteria. Here’s the breakdown:
New SBA Equity Injection Rules
As of June 1, 2025, SBA loans for startups and changes of ownership will require a minimum 10% equity injection of total project costs. While the SBA made significant changes it allows for exceptions for business expansion.