This bill changes the Small Business Administration's 504 loan program, which helps small businesses buy or build buildings and equipment. It loosens how much space owners must occupy, speeds up loan closings, and drops the rule that borrowers prove they could not get credit elsewhere.
504 Modernization and Small Manufacturer Enhancement Act of 2026This bill generally expands the Small Business Administration (SBA) 504 Loan Program to include additional objectives and flexibilities (e. g., new qualifying economic development objectives). The program provides a small business with SBA financing—through a certified development company (CDC) intermediary—for expansion or modernization. Specifically, the bill expands the public policy goals that allow a CDC to qualify for assistance to include additional objectives. These include (1) workforce development through work-based or work-integrated training, and (2) aiding the revitalization of an area for which a disaster has been declared or determined. The bill also authorizes a CDC to take specified actions to facilitate the closing of 504 loans, such as correcting borrower or lender information on loan documents or reallocating up to 10% of the cost of a project. Further, the bill allows small businesses to lease a larger portion of renovated buildings that are financed with 504 loans to other tenants in certain circumstances. In the case of a project to renovate or reconstruct an existing building, a small business may lease a maximum of 66% of the building to commercial or residential tenants if certain conditions are met. For example, the small business must have occupied the building for 12 consecutive months prior to the project. Additionally, the bill exempts CDCs from the requirement to demonstrate they are unable to obtain credit elsewhere to receive 504 loans.
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