C-Suite Wednesday – 504 Lending Program Out of Funds By End of the Week

September 1, 2021

Delaney Sexton
Contributing Editor

C-Suite Wednesday – 504 Lending Program Out of Funds By End of the Week

The SBA predicts that the 504 loan program will likely run out of funds on September 5th. The National Association of Development Companies believes it could be exhausted as early as September 3rd, the end of this week. SBA’s yearly budget for the 504 program is $7.5 billion, and this includes both regular 504 loans and 504 debt refinance loans with expansion.

SBA’s most recent lending report shows that 504 loan originations had already reached $7.5 billion. Once the authorization cap is met, all other 504 applications will be processed and queued for approval on October 1, 2021. The 504 debt refinance without expansion loan program will continue taking applications and approving them throughout the end of the fiscal year. This program also has a $7.5 billion budget with plenty of funds remaining.

Senate Bill S. 2709, referred to as the “Continuing Access to 504 Capital Act”, was looking to amend the Consolidated Appropriations Act, 2021 and increase the 504 budget by $1 billion. There has been no further action taken for this bill.

The SBA will no longer be funding 504 fee waivers at the start of the new fiscal year. If funds for fee and debt relief run out before the beginning of FY22, regular fees will be reinstated for any loans approved after the funds are expended.


  1. How many loans are currently in the backlog at SLPC? Will the current backlog use up any remaining authority in the regular 504 loan program? There were approximately 600 504 applications in house as of 8/25/2021. SLPC estimates indicate that there is likely enough 504 loans at the SLPC at this time to obligate the remaining FY 21 allocation. As with all estimates, the number of loans that the remaining funds will cover is also dependent on the size of the loans in the queue, and whether there are unresolved screen outs on pending applications. SBA projects that FY 21 504 regular (including debt refinance with expansion) program authority will be obligated during the week of September 5, 2021.
  2. Once the $7.5 authorization cap has been reached, can CDCs continue submitting applications for the regular 504 loan program (including 504 debt refi with expansion applications)? Yes. 504 Loans will be processed and queued (but not approved) for approval based on authorization and availability of funds for FY 2022.
  3. What specifically will SLPC staff be able to do with regular 504 applications – i.e., will they be able to process, issue Avoid a Screen Outs, Screen Outs, etc. to get to final loan decisioning? SLPC will continue processing actions as usual but cannot approve or issue 504 loan numbers other than for 504 debt refinancing until SBA receives funds.
  4. Once new funding is in place (beginning October 1), how will any backlog of decisioned loans be processed – will there be a queue based on when the loan was originally decisioned and set aside pending funding availability? SBA is tracking volume but can’t anticipate the actual number until we review and process the 504 loan submissions. There will be a queue of 504 loans ready for approval and when funding is available, SLPC will begin issuing approvals and loan numbers.
  5. Will SBA reserve any program authority to handle possible last minute 327 increases necessary for loans closing for the October bond sale? No.
  6. Once we hit the $7.5 billion cap in the regular 504 loan program, can SLPC process any 327 increases to existing approvals? No.

SBA 504 Industry Update