On Friday the SBA released Technical Updates to the new SOP going into effect on October 1st, 2026. I think for the most part these updates were positive. Below is a summary of the key updates that were made. If you have any questions regarding these updates you can reach me here or directly at redacted 1) When there is an acquisition of a division of a sole proprietorship, and the SBA lender is unable to obtain tax transcript or financial statements that identify the division or segment being purchased, the SBA lender must use alternative forms of third-party verification such as a third-party CPA -prepared or reviewed financial statements, tax payment records, etc. 2) The SBA has revised the rule around trusts guaranteeing SBA 7A loans. Now only if the Trust has a 20% or greater ownership interest must it guarantee the loan. In that case the trust and any “Trustor” must guarantee the loan. This removes the 1% rule that was driving most investment groups crazy. 3) You can once again use an SBA 7A small balance and Express loans to acquire a business so long as the business purchase price is $350,000 or less. I am not sure how many lenders will use this product going forward for business acquisitions as they must do much of the same work as for a standard business acquisition, but the option at least exists. 4) For SBA 504 loans, there is no longer a minimum term on the Bank portion of the SBA 504 loan. In addition, the loan maturity can now be 25 years on all of the debt if the real estate portion of the use of loan proceeds is 51% or more of the total use of loan proceeds (this used to be 75%). This is a big change for SBA 504 loans that include equipment and could impact business acquisition loans where the SBA 504 loan is being used to finance owner-occupied real estate and equipment. 5) For business acquisitions, if there is not a clearly defined continuity of operations and the Applicant is not continuing the seller’s business operations, the Lender may evaluate the transaction as a start-up. The Lender must apply all applicable start-up requirements set for in the SOP. This will allow under-performing businesses to qualify for SBA financing. 6) Working capital adjustment provisions on business acquisitions contained in the Purchase and Sale Agreement are not a rebate to the Borrower and that cash may be retained by the Borrower for working capital in the business. This was not clearly defined in the last version of the SOP and some lenders were concerned this would be an issue going forward. 7) Owner Buyouts can now include an employee(s) who have worked for the business for at least 24 months. That means an employee could qualify for a loan with $0 down to acquire a business. I still think most lenders will want to see equity or large seller notes, but it gives another avenue for business transfers to happen. 8) A loan that facilitates a change of ownership must not have an amortization not more than 10 years unless it includes Special Use Properties. If 85% or more of the value goes towards the real estate on the Special Use Property, then the full loan can qualify for a 25-year amortization. This impacts properties such as car washes, hotels, self-storage, senior care facilities, etc. This is an important change because it was creating a situation before where there would need to be a very small second loan for the business value on these properties. 9) For QoE reports, the SBA now allows a Bank to review a QofE report ordered by the buyer directly. That report must be reviewed by a qualified vendor of the Bank and accepted by that vendor. This is a big change. Buyers are going to have to be careful what type of QofE reports they order on their own and will need to be sure that QofE reports meets the conditions outlined in the SOP for QofE reports, but it gives an avenue to keep the process moving and for the buyer to control the QofE report. 10) The SBA does not consider as part of the equity injection expenses related to education, advisory services, or fees paid by the Applicant to an Agent as prepaid expenses that qualify for equity. This is one of the negative impacts. This means buyers will need to cover these expenses out of pocket. We can try to build additional working capital into SBA 7A loans to reimburse for these expenses so long as the cash flow supports the higher loan amount. 11) The Bank may rely on projections for repayment on loans secured by Special Use Properties if the financial information cannot be obtained. If the loan is fully secured by the collateral, the lender may rely on projections to satisfy the DSCR requirement. This is big if the property is currently under-performing and the buyer / guarantor has experience to turn it around. 12) When 7A loans are used for multiple purposes (excluding business acquisitions), the maturity may be blended or if 51% or more of the use of the 7A loan proceeds are for real estate, the maximum maturity may be for 25 years. Again, this excludes business acquisitions. This is a big clarification because most lenders thought the adjustment made for business acquisitions was impacting all SBA lending. Again, if you have any questions regarding these changes, you can reach me here or directly at redacted