When your small business is ready to grow, SBA loans are a helpful resource for accessing the capital you need to scale. If an SBA loan may be in your business’s future, it’s important to stay updated on the application and eligibility requirements for getting one.
As of June 1, 2025, the U.S. Small Business Administration is implementing an updated Standard Operating Procedure (SOP). The new SOP changes factors such as ownership requirements, score requirements, review processes, and more. Understanding the breakdown of these changes will help your small business prepare to apply when the time is right.
Owner Citizenship Requirements
Under the new SOP, all owners, guarantors, and key employees for the business must be U.S. citizens, nationals, or lawful permanent residents, meaning they must have a green card. None of these individuals within the business can be “ineligible persons”, such as foreign nationals, refugees, those who were granted asylum, visa holders, DACA participants, or undocumented immigrants.
Ineligible persons cannot have held key roles in the business in the six months before its loan application is submitted. Applicants must provide documentation proving that all individuals in key roles are eligible to apply.
Eligibility Requirements: SBSS Score & Access to Funds
The minimum Small Business Scoring Service (SBSS) score was raised from 155 to 165. This means that taking steps to improve your small business’s credit score is now even more essential for a successful application.
Before these changes took effect, applicants and lenders already had to show that the business has no other way to access the funds they’re applying for, but the requirements have expanded. Applicants must take a personal resources test to show that they can’t access credit elsewhere. Lenders will check if applicants have personal assets that could be used instead of a loan, and if they do, they may be ineligible for financing. For those who are eligible, lenders must give the SBA specific reasons an applicant couldn’t get credit elsewhere and provide documentation.
Small businesses involved in marijuana, hemp, and CBD are now ineligible to apply for SBA loans.
Other Significant Updates
The categories for SBA 7(a) loans have changed, which may affect the amount of time the application review process takes. Standard loans are now considered those greater than $350,000, while small loans are for that amount or less.
The new SOP also brings back the franchise directory, which is a list of franchise businesses that the SBA has preapproved. Franchise owners within businesses on this list may have a quicker and simpler approval process for their loan applications. If a franchise isn’t on the list, lenders must review the business themselves to decide if an applicant is eligible.
Other changes will affect how lenders review and process SBA loan applications, but these are the factors that will most directly impact small businesses. By making any necessary adjustments now, you can set your small business up for a successful SBA loan application in the future.