SBA Hot Topic Tuesday: Proposed $10 Million SBA 7(a) and 504 Loan Cap Models at Zero Subsidy — What Loeffler Told Congress Last Week

July 21, 2026

Bob Coleman
Founder & Publisher

SBA Hot Topic Tuesday: Proposed $10 Million SBA 7(a) and 504 Loan Cap Models at Zero Subsidy — What Loeffler Told Congress Last Week

SBA Administrator Kelly Loeffler spent 90 minutes in front of House appropriators last Tuesday, and if you’re a 7(a) lender, this was the most consequential hearing of the year.

The headline: the $10 million loan cap is a real possibility. The White House budget includes authorization to double the 7(a) and 504 limits, and Loeffler told the subcommittee SBA has already modeled it — zero subsidy to taxpayers, underwriting standards maintained.

“Our loan limits in the SBA have not been raised since 2010. So 16 years ago, it was set at $5 million,” she testified. About 200 loans have hit that ceiling in the last couple of years, and manufacturing is now SBA’s largest lending category.

Three more items:

Defaults have quadrupled. Default ratios in SBA’s smallest loan programs have risen to 5.11%, up from 1.32%. Loeffler blamed the prior administration’s “Do What You Do” underwriting framework — and said nearly 500 lenders walked away from SBA programs because they lost confidence in the guardrails. “What does it do when banks lose confidence in the SBA’s underwriting standards? They pull back from lending.”

A lender portal is coming. A Fortune 500 CTO is rebuilding SBA’s systems, and fraud detection is moving to the front end — “before the money gets out the door, not after.” Expect changes to your approval and disbursement workflow.

PPP collections are live. $22 billion, covering 562,000 borrowers, has gone to the Treasury for collections and the DOJ for prosecution. Your borrowers will be calling.

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