For the past few years, the SBA 7(a) loan program has been running hot. Record-low interest rates, waived loan fees, and loosened eligibility standards fueled historic lending numbers. In 2024 alone, over 78,000 SBA loans were authorized, setting a new benchmark and reinforcing the program’s role as a critical engine for small business growth.

But as we step into 2025, signs are beginning to shift.

A new SOP went into effect in June, undoing several of the reforms that had opened the doors for more borrowers. Loan fees are back. Citizenship rules are tighter. Small loans are now redefined with a lower threshold. And lender enthusiasm? A bit more cautious.

So the question is: was 2024 the peak? Or is there still room to grow?

What’s Changing in SBA Lending

Several policy updates are reshaping the SBA landscape, especially for the 7(a) program:

Citizenship Requirements
The SBA now requires 100% U.S. ownership for loan eligibility. That disqualifies many businesses with even one foreign partner, reducing the pool of potential borrowers.
Fee Relief is Over
For years, waived loan fees made the SBA option even more attractive. That incentive is gone. Standard fees are back, and they’re significant—especially on larger loan sizes.
Lower Threshold for Small Loans
Previously, loans up to $500,000 were considered “small” and eligible for streamlined underwriting. That limit is now back to $350,000, creating more friction for buyers looking for mid-market deals.
Stricter Business Acquisition Rules
Seller notes now must be on full standby to qualify as part of buyer equity. This move increases upfront capital requirements and can limit deal flexibility.
No More MCA Refinances
Merchant Cash Advance (MCA) debt can no longer be refinanced with SBA funds. This rule change impacts many businesses that used MCAs during COVID to stay afloat and are now saddled with high-interest debt.

These updates are designed to protect the long-term integrity of the program, but they also create real obstacles for borrowers and lenders alike.

The Lender Landscape Is Shifting Too

Lenders are responding in different ways. Some are pulling back from SBA entirely, viewing the regulatory changes and rising defaults as a reason to refocus on conventional lending. Others, especially those who understand how to structure creative SBA deals, are leaning in. They see opportunity in the vacuum.

The biggest divide is between what some call “checkbox lenders” and “dealmakers.” Checkbox lenders are more conservative. They want high liquidity, perfect credit, and strong collateral. They advertise SBA but think like banks.

Dealmaking lenders, on the other hand, know how to use the SBA the way it was intended, to help people who don’t check every box. They know the program, they know how to structure a loan creatively, and they’re not afraid of a little complexity.

Is a Cooldown Inevitable?

It depends on how you define it.

Volume may taper off from the 2024 highs, especially as fewer borrowers qualify under the updated SOP. But for serious borrowers and experienced lenders, there’s still plenty of opportunity.

A “cooldown” doesn’t mean collapse. It means a return to fundamentals. More scrutiny. More documentation. And more focus on real business viability, not just cheap money and fast approvals.

That could be a good thing for the ecosystem. Stronger deals, fewer defaults, and a more sustainable SBA program.

Timing Still Matters

The biggest differentiator in a cooling market? Speed.

With more complexity and fewer lenders actively closing deals, the businesses that win are the ones that come prepared. That means getting documentation in early, working with experienced SBA consultants, and choosing a lender that actually wants to close.

In this new lending cycle, readiness isn’t optional. It’s a competitive advantage.

Ready to Navigate the New SBA Landscape?

At Rapid Business Plans, we help buyers and entrepreneurs navigate SBA lending in real time. Whether the market is booming or cooling, we build lender-ready business plans that reduce delays, improve confidence, and get deals funded faster.

Our team works directly with borrowers, brokers, and lenders to package SBA deals that get across the finish line.

Looking for help? Start here: www.rapidbusinessplans.com