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Build Back Better Act Could Bring $25 Billion to SBA Loan Programs

Oct 2021

The $3.5 trillion budget package has had multiple provisions approved by the House Small Business Committee. If passed, the provisions would include $25 billion to support small businesses over the next decade through various Small Business Administration (SBA) loan programs.

Here is how the money would be utilized:

• Over the course of 10 years, there would be $4.465 billion allocated for a direct 7(a) Loan Program.
• $2.746 billion would establish a direct lending subprogram through the 504 Loan Program. Certified Development Companies could make loans for small contractors, manufacturers and businesses in underserved and underrepresented markets.
• $9.5 billion would be directed to the Small Business Investment Company (SBIC) program. This money would create a subprogram to supply patient capital to underserved markets and small manufacturers.
• $1.75 billion of the budget would fund an uplift accelerator program and business development academy at Historically Black Colleges and Universities (HBCUs), Minority Serving Institutions (MSIs) and community colleges for underrepresented small businesses seeking to contract with the government.
• $1 billion would form a national network of business incubators.
• $600 million would be dedicated to improving the 7(a) Community Advantage Program.
• More than $100 million would be invested in entrepreneurial training initiatives for the formerly incarcerated. This initiative would be through Women Business Centers, Small Business Development Centers and other entities.
• The provisions include the use of $35 million for the creation of a grant for non-profits that operate entrepreneurship training programs. This specifically assists veteran small business contractors.
• $20 million would enhance the SBA’s Office of Native American Affairs, Office of Rural Affairs and create an Office of Emerging Markets.

The SBA 504 Loan Program provides up to 90% financing at below-market, fixed interest rates and long amortization terms up to 25 years for the purchase of major fixed assets, such as owner-occupied commercial real estate, renovations, new construction, energy efficient “green” initiatives and/or fixed heavy duty machinery and equipment, as well as the refinance of commercial mortgage and other business debt with or without a cash-out option.

504 loans are paired with private-sector commercial loans and provide up to $5 million of aggregate SBA eligibility on standard 504 projects; up to $5.5 million per 504 energy efficient green project not exceed $16.5 million in the aggregate; and up to $5.5 million per eligible small manufacturing project with no limit on total SBA dollars available. These are SBA 2nd mortgage loan portions only; there is no limit on overall project dollar size.

For more information about SBA 504 loans in Alabama, Florida or Georgia, contact a Florida First Capital Loan Officer or email us at info@ffcfc.com. Phone: 850.681.3601 or toll-free at 888.320.5504.