The good news is the SBA 504 product has never been more successful. The bad news is, because of its success—for new purchase, construction and refinance with expansion, the program is estimated to run out of money in a couple of weeks for the remainder of SBA’s fiscal year (9/30).

“In this case, the regular 504 program, which includes 504 debt refi with expansion, will reach its congressionally authorized cap of $7.5 billion before the cap is reset on October 1. As of August 21, the regular 504 program had approximately $7 billion in approvals with estimates pointing to the program reaching the cap as soon as September 3rd.”

–from NADCO’s “504 Approaches Lending Cap,” August 25, 2021

Important Details

It is estimated that as of September 5, 2021 the SBA will have run out of money for all SBA 504 purchase, construction and refinance-with-expansion projects. However, there is still plenty of money to process refinance-without-expansion projects.

Though the SBA will not be able to provide final approved authorizations from the time that the money runs out until October 1st, the SBA will continue to process loans throughout that time period and communicate to CDCs like MWSBF and let us know if the loan has been “decisioned” (meaning will be approved on October 1, 2021 when the SBA will again have funds to issues approvals (i.e. coinciding with the beginning of their new fiscal year)).

The SBA will notify the CDC of all decisions –approval or screen out—but will not be able to issue the authorization until October 1st.

Please Note: Prospective borrowers have previously been receiving fee waivers as part of the CARES Act. As that program was set to end September 30, 2021, fee relief will now end when appropriated funds are no longer available.  

What should we do about this?

Please contact your members of Congress now to share with them the impact of this program in their communities and advocate with them to support keeping the program open. 

If you have questions please email marketing@mwsbf.com or for specific deals already in process your MWSBF loan officer


For more information about the success of the program and upcoming changes, see the adapted correspondence from National Association of Development Companies (NADCO) below:

504 Program Approaches Lending Cap

NADCO and SBA have communicated with members about the extraordinarily high volume of 504 approvals this year. The good news is that as an industry, we are doing our part to support small business recovery with what they need most: long-term, fixed-rate capital to rebuild and plan for the future.

However, the growth of the program does not come without challenges. In this case, the regular 504 program, which includes 504 debt refi with expansion, will reach its congressionally authorized cap of $7.5 billion before the cap is reset on October 1. As of August 21, the regular 504 program had approximately $7 billion in approvals with estimates pointing to the program reaching the cap as soon as September 3rd.

NADCO has been and will continue working with members of Congress and SBA to provide more authority for the program, but want you to be aware we do expect to reach the cap before the end of the fiscal year.

What does this mean to the small business applicant, the CDC, and lending partner?

• Absent congressional action to provide additional authority for the regular 504 program, the SBA will be unable to approve new loans or increases to existing loan approvals once the program reaches the $7.5 billion cap. Please note that the cap is based on approvals, not on closed or disbursed loans.

• CDCs can submit regular 504 loans (including 504 debt refi with expansion). However, once approvals reach the $7.5 billion cap, these loans cannot be approved. NADCO has asked SBA to provide the industry with more information about what happens to loans in process once we reach the cap. Stay tuned for additional details as they are made available.

• CDCs can submit 504 debt refi without expansion loans, which can be processed with authorizations issued as usual.

Next Steps

We know how hard you are working to assist your borrowers and how detrimental it would be for the 504 program to come to a halt for any period of time, and we will continue to do everything we can to address this matter.

• Please contact your members of Congress now to share with them the impact of your CDC in their communities and advocate with them to support keeping the program open. (You can find your US Congressional Representatives here: https://www.house.gov/representatives#state-utah and US Senator for Utah here: https://www.senate.gov/states/UT/intro.htm. For more information on contacting federal elected officials visit https://www.usa.gov/elected-officials)

• We are not in danger of reaching the cap on the 504 debt refinance without expansion program, which has a separate authorization cap of $7.5 billion. CDCs can and should continue to work with your borrowers who may benefit from the 504 debt refinance without expansion program to submit packages to SLPC, which can be processed with authorizations issued as usual.