Starting on October 1, 2026, the federal Small Business Administration will release a new Standard Operating Procedure (SOP) and introduce updated guidance for its flagship 504 and 7(a) loan programs.
The revised SOP brings significant enhancements designed to streamline underwriting, increase working capital flexibility, and simplify requirements for small business owners across North Dakota.
“These updates give regional lenders vital flexibility while strengthening overall underwriting clarity,” says Derrick Becker, LCD Group commercial lending director.
Key Takeaways for LCD Group Clients & Lenders
Easier Business Acquisitions: Buying a business alongside commercial real estate is now more streamlined. Rules allow borrowers to pair a 504 loan for fixed assets with a 7(a) revolving working capital line, such as the expanded MARC loan. This keeps borrowers from financing entire acquisitions through heavy monthly term payments, freeing up vital operating cash flow.
These changes are also compatible with LCD Group’s regional and statewide business lending programs.
Simplified Documentation: Non-owner spouses are no longer required to sign personal financial statements. Additionally, loans of $500,000 or less have fewer hazard insurance requirements on secondary collateral.
Updated Credit Standards: Minimum Debt Service Coverage (DSC) increases to 1.15:1. For projects of $5 million or more, Certified Development Companies (CDCs) must formally incorporate the Third-Party Lender’s credit analysis into their submission.
Expanded Green Project Financing: SBA has eliminated the previous $16.5 million aggregate cap on Eligible Energy Projects. Business owners can finance multiple energy-efficient buildings or improvements, provided each debenture stays under the $5.5 million individual limit.
Becker adds that, so far this year, SBA 504 loans through LCD Group have funded $7.9 million, leveraging a total of $20.65 million across projects.
Learn More: Learn more about the SBA 504 Loan and all of LCD Group’s suite of business lending programs. Contact Derrick Becker at (701) 667-7622 or at derrick@lcdgroup.org.
