The SBA Loan Shake-Up 2025:

What Buyers (and Sellers) Should Know

November 3, 2025

This year, the U.S. Small Business Administration (SBA) has rolled out sweeping updates to its flagship 7(a) and 504 loan programs, reshaping how small businesses finance commercial real estate purchases. Combined with temporary interruptions caused by the ongoing federal government shutdown, these changes are affecting lending patterns and timelines across the country. For South Florida business owners and sellers, understanding these dynamics is key to navigating transactions successfully in 2025.

In the New Era of SBA Lending

The current federal government shutdown has temporarily halted new SBA loan approvals and slowed activity across multiple lending programs. According to the SBA, approximately 320 small businesses per day are being delayed from accessing nearly $170 million in financing due to the shutdown’s pause in loan processing. Nationally, an estimated $2.5 billion in small business financing is currently on hold. That means many qualified buyers who planned to use SBA financing for commercial property purchases are now facing extended timelines, added uncertainty, or the need to consider creative interim financing solutions.

How Lee & Associates South Florida Helps Clients Work Around This

While the shutdown’s impact is largely procedural, meaning loans are expected to resume once government operations are restored, deals in progress still face disruption. At Lee & Associates South Florida, our team and our trusted lending partners are taking proactive steps to keep transactions moving, including:

• Coordinating early prequalification with lenders ahead of reopening.
• Exploring conventional or creative financing solutions such as bridge loan structures or seller-held financing to secure properties while waiting for SBA approvals.
• Identifying private or mezzanine debt options to fill temporary funding gaps.
• Advising sellers on how to structure contingencies or flexible closing timelines to retain qualified buyers through the pause.

Even amid this uncertainty, the long-term fundamentals of SBA lending and South Florida’s strong owner-user demand remain sound.

Key Changes to Know in SBA Lending (Effective June 1, 2025)

Once operations resume, SBA lenders are operating under the new Standard Operating Procedures (SOP 50 10 8), which tighten underwriting standards and formalize the rollback of several temporary COVID-era flexibilities. Highlights include:

• Stricter underwriting: The SBA has rescinded the “Do What You Do” flexibility, requiring lenders to follow SBA-defined credit standards instead of internal guidelines.
• Reinstated fees: Guarantee and lender fees that had been waived in prior years are back, modestly raising borrowing costs.
• Tighter equity and seller note rules: Borrowers must provide verifiable equity (typically 10%), and seller financing must be on SBA-approved standby terms.
• More documentation: Lenders now require additional business financials, projections, and property-related due diligence.
• Expanded refinance options: The 504 program now allows more refinancing of existing debt, including prior SBA loans, which may help owner-occupiers restructure at better terms.

These changes reflect a government-wide return to more disciplined credit standards following a period of looser oversight during the pandemic recovery.