SBA has issued Policy Notice 5000-879058, Coordination of 7(a) and 504 for Maximum Loan Limits (dated May 18, 2026, and effective July 4, 2026).  The notice provides important clarification regarding how, for loans receiving an SBA loan number on or after July 4, 2026, multiple 7(a) and 504 loans will be considered for purposes of determining maximum loan size and the maximum SBA guaranty amount that can be outstanding to an individual borrower, including any affiliates of the borrower.  [This policy clarification is not related to any pending legislation that, if enacted, could raise the maximum 7(a) loan size to $10 million.]

Per the notice, “SBA is clarifying in policy that:

  1. a borrower’s outstanding loan balance under the 7(a) loan program, up to an including the maximum loan limit, does not reduce the maximum loan amount available under the 504 loan program, except as specifically provided in [the] Notice; and
  2. a 504 Project may include multiple assets that are eligible be financed simultaneously.”

These clarifications reflect the fact that the 7(a) and 504 programs are authorized under separate statutes:

  • 7(a):  Section 7(a) of the Small Business Act (15 U.S.C. § 636(a)).
  • 504:  Title V of the Small Business Investment Act of 1958 (15 U.S.C. § 696).

7(a) Program Clarifications:

The Notice reiterates SBA’s long‑standing statutory interpretation:

  • The maximum individual 7(a) loan remains $5 million.
  • The maximum total SBA‑guaranteed exposure to any one borrower (including affiliates) remains at $3.75 million ($4.75 million for a qualifying export loan) across ALL SBA programs, including 504.

504 Program Clarifications:

For 504 loans, SBA clarifies how existing statutory 504 debenture limits will apply and confirms that SBA‑guaranteed 7(a) loan amounts will not be included when calculating 504 debenture maximums.

Per the notice, “SBA is recognizing the statutorily established independent limit of the 504 loan program, thereby allowing lenders to issue both 7(a) and 504 loans sequentially”.  Under this interpretation, “a lender may first approve a 7(a) loan followed with a 504 transaction approved by the CDC second”.  With this sequencing, “a small business concern can, for example, use the 7(a) program to fund their working capital and light equipment while also using the 504 program to finance their facility”.

SBA is revising SOP 50 10 8, Section C, 504 Loan Specific Requirement, and Appendix 3, Definitions, to reflect these clarifications.  Please see the notice for complete details regarding these changes and for the specific SOP requirements that are being amended by this Notice. 

SBA Administrator Kelly Loeffler announced this policy clarification in the May 18, 2026, Press Release titled:  SBA Doubles Cumulative 7(a) and 504 Loan Limit to $10 Million – Effective July 4, eligible borrowers can access record levels of SBA-backed funding.