As a Florida 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 Florida's legislative landscape continues to evolve with new priorities 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 Florida 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): 6.337% (estimated)
• 10-Year Fixed Rate (Refinance): 6.373% (estimated)

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).

Florida-Specific Legislative Priorities

The National Federation of Independent Business (NFIB) released its legislative agenda for Florida, outlining key priorities that affect small businesses.

These priorities reflect the ongoing efforts to make Florida an even more business-friendly state.

Key Florida Legislative Priorities for 2025:

• Eliminating the Business Rent Tax: The NFIB successfully lobbied to reduce the rate from 4.5% to 2% and now supports fully eliminating this tax. The rate reduction took effect in June 2024, and complete elimination is a major priority for the 2025 legislative session.
• Defending the 2023 Tort Reform: The NFIB opposes any legislation that threatens the landmark lawsuit abuse reform passed in 2023.
• Verification of Reemployment Eligibility: Ensuring that only fully eligible job seekers receive the reemployment benefits that employers pay for.
• Workers' Compensation Alternatives: Support for allowing businesses to opt into alternatives to Workers' Compensation coverage to reduce costs.
• Public Sector Union Restrictions: Supporting provisions that would prohibit taxpayer funds from being used to conduct union business during work hours.

Florida Chamber of Commerce Priorities:

The Florida Chamber of Commerce has also released its 2025 agenda, which includes easing tax and regulatory burdens by advocating for the elimination of the Florida-only Business Rent Tax, as well as further reducing tax and regulatory barriers to economic growth.

How These Changes Impact Your Business

Benefits of SBA 504 Loan Program Changes:

1. 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.
2. Increased Access to Capital: The higher loan-to-value ratio (90%) for projects with other business expenses provides more financing options.
3. More Flexible Financing: Aligning standards for different types of refinancing simplifies the process and expands eligibility.

Impact of Florida Legislative Priorities:

1. Reduced Tax Burden: The potential elimination of the Business Rent Tax would reduce operating costs for businesses that lease their space.
2. Legal Protection: Maintaining the 2023 tort reforms helps shield businesses from excessive litigation costs.
3. Insurance Cost Reductions: Alternative Workers' Compensation options could provide more affordable coverage options.

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. Plan for Potential Tax Changes: Budget for the possibility of business rent tax reductions or elimination.
4. Review Insurance Options: Explore alternatives to traditional Workers' Compensation coverage if allowed under new legislation.

The 2025 SBA loan program changes and Florida legislative priorities offer significant opportunities for small business owners to reduce costs and access capital more easily. 

By staying informed about these changes and working with experienced lenders like Florida Business Development Corporation (FBDC), you can position your business to take advantage of these new opportunities.

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