WASHINGTON--The Small Business Administration (SBA) announced a new rule Monday to allow eligible borrowers to combine their 7(a) and 504 loans for up to $10 million in SBA-backed financing, a 50% increase, America's Credit Unions reported.
The change takes effect July 4.
Under the new policy, qualified borrowers who secure a 7(a) loan first may access up to $5 million through the 7(a) loan program and up to $5 million through the 504 loan program, for a combined total of $10 million in SBA-backed financing.
Loans made under the 7(a) program can be up to 85% guaranteed by the government, with the guaranteed portion not counting against a credit union’s member business lending cap of 12.25% of assets. The 504 loan program provides long-term, fixed-rate financing for major fixed assets that promote business growth and job creation, ACU noted.