As a Georgia small business owner, staying informed about the latest SBA regulations is crucial for maximizing your financing options and managing operational costs.

The SBA has introduced significant changes to its loan programs in 2025, while Georgia's business-friendly environment continues to evolve with new opportunities that could impact your business.

Here's what you need to know to navigate these changes effectively.

SBA 7(a) Loan Program Updates

The SBA has recently made significant changes to its 7(a) loan program.

On April 22, 2025, the SBA announced it would eliminate the Biden-era "Do What You Do" underwriting standards that had reduced lending criteria within the program and revert to "heightened pre-Biden standards" to restore the program's financial integrity.

Key Changes to the 7(a) Program:

• Reinstated Lender Fees: The SBA has restored lender fees to cover the cost of failed loans, addressing the negative cash flow of approximately $397 million in FY 2024.
• Stricter Underwriting Standards: The return to more rigorous underwriting criteria means business owners may face more scrutiny when applying for loans.
• Reinstated Franchise Directory: The SBA is reinstating and streamlining the Franchise Directory to help lenders determine whether certain businesses are eligible to receive SBA loans.

What This Means for Georgia Small Businesses:

While these changes aim to ensure the program's long-term sustainability, they may make it more challenging to qualify for 7(a) loans.

However, the program will continue to offer valuable benefits, including:

• Loan amounts up to $5 million
• Competitive interest rates
• Longer repayment terms (up to 25 years for real estate)
• Lower down payments compared to conventional loans

SBA 504 Loan Program Updates

The SBA has implemented significant changes to the 504 loan program, making refinancing easier and more accessible for small businesses.

Key Changes to the 504 Program:

• Debt Refinancing Improvements: The SBA has removed the 50% cap on debt refinance without expansion to align with current legislation, effective November 15, 2024.
• Increased Loan-to-Value Ratio: For debt refinancing without expansion projects that include other business expenses, the loan-to-value requirement has been raised to 90%, and the cap on Eligible Business Expenses has been eliminated.
• Aligned Standards: The "substantially all" standard for debt refinancing with expansion has been reduced from 85% to 75%, making it consistent with the debt refinancing without expansion standard.
• Eliminated Substantial Benefit Test: The 10% substantial benefit test has been eliminated for both debt refinancing with expansion and without expansion when refinancing other government debt.
• Expanded Eligible Business Expenses: Certain "other secured debt" can now be included as an Eligible Business Expense.

Current Interest Rates (April 2025):

• 25-Year Fixed Rate (Standard): 6.437%
• 25-Year Fixed Rate (Refinance): 6.466%
• 20-Year Fixed Rate (Standard): 6.457%
• 20-Year Fixed Rate (Refinance): 6.487%
• 10-Year Fixed Rate (Standard): 6.348%
• 10-Year Fixed Rate (Refinance): 6.384%

New Ownership Requirements

Effective March 7, 2025, the SBA introduced stricter citizenship verification requirements. To qualify for an SBA loan, applicant businesses must now be 100% owned by U.S. citizens, U.S. Nationals, or Lawful Permanent Residents (green card holders).

Georgia's Business-Friendly Environment

Georgia continues to strengthen its position as one of the top states for doing business, consistently ranking among the best in national business climate surveys.

Key Georgia Business Advantages for 2025:

• Strong Economic Growth: Georgia's economy continues to expand with major investments in technology, film production, logistics, and manufacturing sectors.
• Right-to-Work Laws: Georgia's comprehensive right-to-work laws provide businesses with workforce flexibility.
• Competitive Tax Environment: The state maintains competitive tax rates and offers various incentives for business growth and expansion.
• Strategic Location: Georgia's location provides excellent connectivity, with Atlanta serving as a major transportation hub through Hartsfield-Jackson International Airport, the world's busiest airport.
• Workforce Development: Georgia Quick Start provides customized workforce training free of charge to qualifying businesses, having trained thousands of workers across the state.

Recent Major Investments in Georgia:

• Rivian: $5 billion electric vehicle manufacturing facility creating 7,500 jobs
• Microsoft: Major data center expansions across the state
• Hyundai Motor Group: $5.5 billion electric vehicle and battery manufacturing facility in Bryan County
• Film Industry: Over $4 billion in annual direct spending on film and television production

How These Changes Impact Your Business

Benefits of SBA 504 Loan Program Changes:

• Cost Savings on Refinancing: The removal of the 50% cap on debt refinance without expansion and the elimination of the 10% substantial benefit test makes it easier to refinance existing business debt at potentially lower rates.
• Increased Access to Capital: The higher loan-to-value ratio (90%) for projects with other business expenses provides more financing options.
• More Flexible Financing: Aligning standards for different types of refinancing simplifies the process and expands eligibility.

Impact of Georgia's Business Environment:

• Lower Operating Costs: Georgia's competitive business environment helps reduce overall operational expenses.
• Access to Skilled Workforce: Strong workforce development programs ensure access to trained employees.
• Strategic Growth Opportunities: Major investments and infrastructure development create new business opportunities.

Preparing for These Changes

Steps to Take Now:

1. Evaluate Refinancing Opportunities: Review your current business debt to determine if refinancing under the new SBA 504 guidelines could save money.
2. Check Ownership Compliance: Ensure your business meets the new stricter citizenship requirements for SBA loans.
3. Explore Georgia Incentives: Research state and local incentive programs that could benefit your business expansion plans.
4. Consider Strategic Expansion: With Georgia's growing economy, evaluate opportunities to expand operations or enter new markets.
5. Review Workforce Needs: Take advantage of Georgia's workforce development programs to train employees for new technologies or processes.

Working with GSBC

The 2025 SBA loan program changes and Georgia's strong business environment offer significant opportunities for small business owners to reduce costs and access capital more easily.

Georgia Small Business Capital (GSBC) has been helping Georgia businesses navigate SBA financing since 1989, with over $14 billion in total 504 projects approved and 76,000+ jobs created.

GSBC's commitment to certainty, speed, and service ensures you have expert guidance through these regulatory changes. Their experienced team understands both the evolving SBA landscape and Georgia's unique business advantages.

For personalized guidance on how these changes might affect your specific business situation, contact GSBC to schedule a consultation with a loan officer who can help you navigate the evolving landscape of small business financing in Georgia.

Contact Georgia Small Business Capital at (404) 209-2600 or info@ga504.com to learn how these 2025 changes can benefit your Georgia business.