A big boost to small businesses: SBA 504 Loan appraisal threshold is raised

On December 21, the U.S. Senate passed the Small Business ACE Act (H.R. 6348). 

This new law means that the existing statutory appraisal threshold for 504 loans secured by commercial real estate has been raised from $250,000 to $500,000 to match the federal regulators’ current appraisal requirement.

This new law will have a significant positive impact on small businesses. According to Tracy Whitney, LCD Group’s SBA 504 program officer, this revision allows the applicant to purchase real estate less a costly $3,000-$5000 appraisal if the real property cost is under $500,000.

The SBA will be providing more information in the coming weeks regarding the implementation of this beneficial change, however, Whitney says early indications are quite positive. 

“It appears that the real estate securing a project will only require an in-house evaluation by the bank involved in the project,” notes Whitney. 

The in-house evaluation would document that the value of the real property is equal to or greater than the loan request to the lenders for same. 

“This SBA increase is relatively big and will provide a significant boost to small business lending,” says Brent Ekstrom, LCD Group executive director.

Contact Tracy Whitney today to learn more about how this change can benefit existing and potential new loans.

Tracy Whitney

Tracy Whitney

Loan Officer



Phone: 701.667.7602

Email: tracy@lcdgroup.org