U.S. Small Business Administration will Relax Job Requirements for its 504 Loan Program

The U.S. Small Business Administration (SBA) announced that it plans to change the job creation or sustaining requirements to qualify for a loan under the SBA's 504 Loan Program. Currently, a small business can qualify for the 504 Loan Program if, among other conditions, the project funded by the loan will result in the employer creating or preserving at least one job for every $90,000 guaranteed by the SBA.

Under the planned change, the project would have to create or preserve at least one job for every $95,000 guaranteed by the SBA. Here's an example of what this could mean for a small auto repair business:

Let’s pretend a repair shop receives a $180,000 loan to add a new service bay. Under the current rule, the shop would have to show that adding that bay would result in them hiring two more technicians (180,000/90,000=2). Under the new rule, the shop would only have to add one new employee (95,000 fits in 180,000 only once).

This change could make it easier for small repair shops to qualify for the SBA's 504 Loan Program.

Click here to read SBA's full official notice announcing the policy change.