- SBA now allows combo 7(a) and 504 loans up to $10 million.
- This raises the SBA maximum financing level to its highest level.
- AAHOA calls it a step toward expanding access to capital.
THE U.S. SMALL Business Administration’s new rule allows eligible borrowers to combine 7(a) and 504 loans for up to $10 million, raising the cap from $5 million. Industry associations, including AAHOA, view this as a step toward expanding small businesses’ access to capital.
Small manufacturers can currently secure multiple 504 loans if each is tied to a distinct project and will also be eligible for up to $5 million through the 7(a) loan program, SBA said in a statement. Effective July 4, the rule raises the SBA maximum financing level to its highest point.
“The Trump SBA is unleashing historic new capital to support the millions of small businesses that are currently in growth mode,” said Kelly Loeffler, SBA administrator. “By doubling the combined loan limits of SBA’s 7(a) and 504 loans, this administration is empowering job creators, particularly manufacturers, to invest in American workers, rebuild our industrial strength and grow the small business economy.”
Under the SBA’s action, eligible manufacturers may access up to $5 million in SBA 7(a) financing and up to $5 million in SBA 504 financing for business purposes, including expansion, equipment purchases and operations.
AAHOA welcomes rule change
AAHOA supports extending similar lending flexibility to the lodging industry to help hotel owners manage rising development, renovation and financing costs. It also supports the STRONG Act, with 22 bipartisan cosponsors and the LIONS Act, which would raise SBA 7(a) and 504 loan limits from $5 million to $10 million.
Rahul Patel, AAHOA chairman, said the association appreciates ongoing engagement with federal policymakers on issues affecting small business owners.
"Access to capital remains a critical issue for hotel owners and we will continue advocating for policies that better reflect today's economic realities and investment needs,” he said. “This action by the administration signals that loan limits are, in fact, too low and it is time they are updated. This is why AAHOA encourages Congress to pass the bipartisan STRONG Act, which raises the loan limit of both the 7a and 504 programs to $10 million each."
While the SBA’s action increases combined access to capital, it does not address AAHOA’s position that loan limits should be raised to reflect construction costs, refinancing needs and business growth. AAHOA maintains that existing federal lending caps remain restrictive for many hotel owners and small business operators.
"Access to capital is essential for hotel owners working to grow and sustain their businesses," said Laura Lee Blake, AAHOA president and CEO. "We will continue working with policymakers to ensure lending programs keep pace with the needs of small business owners investing in their properties, employees and communities."
The actions build on the Trump administration’s commitment to supporting small business growth, which is already in expansion mode thanks to the Working Family Tax Cuts, fair trade and historic deregulation.
In February, two of AAHOA’s past chairs said the SBA’s decision to bar green card holders and other non-U.S. citizens from its main lending program would affect immigrant entrepreneurs. They said the rule could have long-term effects on the hospitality industry, which relies on family-run and immigrant-owned businesses.
