504 Changes in SBA SOP 50 10 8: What Changed on June 1, 2025 – and What It Means for SBA 504 Lending

With the SBA’s revised Standard Operating Procedure (SOP) 50 10 8 Technical Update version in effect since June 1, 2025, it’s time to prepare for key updates that will shape how we serve small businesses through the SBA 504 program. Here’s a quick breakdown of the most significant changes — and the critical elements that are staying the same.

Franchise Requirements Return to the SOP

Franchise-related guidance is back. This means franchise eligibility will now follow a two-phase approach:

  • Now through December 31, 2025

    • Applicants with a franchise or similar agreement (per FTC definition and including fuel supply) must be listed on the Franchise Directory. 

    • An executed Franchise Addendum may be required which B:Side will collect OR the franchisor needs to have an executed SBA Franchisor Certification on file with the SBA

  • January 1, 2026 forward, the executed SBA Franchisor Certificate is required. 

Liquidity & Credit Elsewhere: Increased Analysis Required

SOP 50 10 8 brings back the requirement that CDCs evaluate liquidity when analyzing whether a borrower can secure financing from other sources:

  • CDCs must assess whether any part of the loan request could be met by the liquidity of:

    • The applicant

    • The operating company

    • Any owners holding 20% or more interest

  • The applicant business can retain the necessary funds for capital expenditures in the next 24 months and necessary working capital.

Energy Public Policy Project Cap Reinstated

The $16.5 million cap on total outstanding SBA 504 debentures under the Energy Public Policy Project has been reinstated. Importantly:

  • This is in addition to the standard SBA exposure limit of $5 million per applicant and affiliates.

  • This cap still allows up to three energy public policy projects at $5.5 million each.

U.S. Citizenship Eligibility Requirements Now Codified

SBA has codified a March 2025 policy update: all 504 loan applicants must be 100% beneficially owned by:

  • U.S. Citizens

  • U.S. Nationals

  • Lawful Permanent Residents

In addition, all direct or indirect business entity owners must be created, organized, or incorporated in the United States and all individual owners and guarantors must have a primary residence in the United States. 

Key Elements That Remain Consistent

While some big changes are rolling in, several policies remain unchanged in SOP 50 10 8:

  • Alternative Size Standards introduced in March 2024 are still active:

    • Tangible Net Worth: < $20 million

    • 2-Year Average Net Income: < $6.5 million

  • Affiliation Rules remain the same:

    • Based on ownership percentages and NAICS codes

    • Criteria last updated in May 2023

Ready to Learn More?

If your team would benefit from a tailored SOP 50 10 8 training, B:Side’s Client Relations Officers are ready to support you. We’re here to help you understand these changes — and how they affect loan structuring and underwriting.

As always, thank you for helping us fulfill our mission to support small businesses. Let’s continue driving impact together. Contact us.

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