The SBA’s new fee relief for the 504 loan program is making headlines. Beginning October 1, 2025 through September 30, 2026, 504 loans made to manufacturers (NAICS 31–33) will see both the upfront guaranty fee and annual service fee waived (set to 0 %). For 7(a) manufacturing loans up to $950,000, the upfront guarantee fee will also be waived.

These changes do not apply to non‑manufacturing SBA loans, which will continue under the standard fee structure. For 504, that means a 0.50 % upfront guaranty fee and 0.209 % annual service fee for most non‑manufacturing loans.

The waiver also applies to eligible refinance options under 504 (Debt Refinance With and Without Expansion), as long as the project qualifies as manufacturing.

A few caveats: the 7(a) fee waiver affects only the upfront fee (not the annual service fee), and any structuring of multiple loans in a short time period may trigger fee aggregation rules, particularly under 7(a). Borrowers should work closely with lenders to avoid missteps.

What the Waiver Covers, and What It Doesn’t

Who Qualifies
The waiver applies only to 504 loans for manufacturers, meaning businesses classified under NAICS codes 31‑33.
Fee Types Waived
For qualifying 504 loans, both the upfront guaranty fee and the annual service fee will be set to 0%.
Applicable Loan Types
The waiver extends to new 504 loans including those under the Debt Refinance with Expansion and Debt Refinance without Expansion programs.
Non-Manufacturer Loans Still Fee-Based
For 504 deals outside manufacturing, fees will still apply. In these cases:

Upfront guaranty fee: 0.50%
Annual service fee: 0.209% of the outstanding balance for standard 504 loans
For 504 Debt Refinance Without Expansion: service fee is slightly higher, at 0.2115%

Why SBA Did This

The waiver is part of the SBA’s strategy under the “Made in America” initiative, which aims to bolster domestic manufacturing by reducing capital barriers. By waiving fees, the SBA hopes to encourage investment in machinery, real estate, automation, and other fixed assets.

It’s also a way to direct capital into sectors viewed as strategic for supply chain resilience and national competitiveness.

Opportunities Created by the Waiver

Cost Savings
Manufacturers can save on both upfront and annual costs, which improves cash flow and reduces the hurdle to invest in long-term assets.
Debt Refinancing Appeal
Eligible borrowers with existing 504 debt may consider refinancing under the waiver if structured properly, possibly lowering the effective cost of capital.
Stronger Deal Attractiveness
Brokers and lenders can now use the fee waiver as a selling point when structuring manufacturing deals, being able to offer “zero‑fee 504 financing” is powerful in the marketplace.

Key Risks, Nuances & What to Watch

Eligibility Testing
Only manufacturers under those NAICS codes qualify. Misclassification or borderline sectors may lead to disqualification or clawbacks.
Term Limits of the Waiver
The waiver is temporary (FY 2026 only). Borrowers and lenders must take action during this window; missing it means reverting to standard fees in future years.
Structuring Multiple Loans Within 90 Days
In the 7(a) program, there is a “90‑day rule” whereby multiple loans in that window may be aggregated for fee calculation, affecting whether the waiver applies. While this is for 7(a), structure rules are complex and can interact in cross‑program financing scenarios.
Non-Manufacturer Projects Still Pay Fees
Any portion of a 504 project that doesn’t qualify (e.g., components not strictly manufacturing) might still incur fees proportional to that portion.
Communication & Expectation Management
Borrowers may assume “fee‑free” across all SBA lending. It is critical that lenders, brokers, and business owners understand the carve-outs and conditions.

What Manufacturing Borrowers Should Do Now

Evaluate whether your business truly qualifies under NAICS codes 31‑33
Prioritize 504 deals now while the waiver is in effect
Discuss with your lender or CDC how the waiver changes your project cash flow
Compare refinancing options for existing 504 loans
Plan future years’ cost assumptions knowing the waiver will expire

Use This Break to Build Smart

The SBA’s 504 fee waiver is a significant, time-limited incentive tailored to manufacturers. For eligible businesses, it means lower transaction costs, improved financial flexibility, and an enhanced ability to invest in fixed assets. But qualification, timing, and structure all matter. Use the waiver wisely.

If you’re structuring a manufacturing project or evaluating refinancing, a business plan and financial model aligned with SBA expectations can make all the difference.

Rapid Business Plans is here to help you assess eligibility, model impact, and structure your 504 opportunity.