SBA finalizes changes to small business investment program (Courtesy of the Jacksonville Business Journal) — The Small Business Administration has finalized a rule designed to speed up one of its public-private partnership programs.
The new rule, set to go into effect Feb. 2, targets the Small Business Investment Company program, in which the agency issues licenses and guarantees to private investment firms to invest in small businesses. The SBIC reached a record $53 billion in combined private capital and SBA leverage in fiscal year 2025, compared to $46 billion in fiscal 2024. The SBA also approved a record 86 SBIC licenses on a conditional basis.
The new rule removes a number of regulations and definitions that are ether outdated or no longer in use, according to the SBA. It also removes or alters a number of small or detail-oriented eligibility regulations.
One clarification emphasizes that the SBIC program does not prohibit investments in small businesses engaged in the extraction or processing of critical minerals. Another change removes the restriction on individuals and entities not being able to have ownership stakes of more than 10% in two separate SBICs without the SBA’s prior written approval, as the SBA already has rules for individual ownership.
“Confidence in President Trump’s pro-growth, America First agenda is driving private capital into America’s small businesses at record levels — and the SBIC program is a critical part of that momentum,” said SBA Administrator Kelly Loeffler, in a statement. “By modernizing decades-old regulations, this final rule strengthens our public-private partnership and ensures capital can flow more efficiently to qualified emerging growth companies ranging from startups to manufacturers who are powering innovation, strengthening critical supply chains, and securing America’s industrial future by building today.”
Additional changes at the SBA
The final rule is the latest in a string of changes the SBA has made under the Trump administration.
The SBA in 2025 rolled out the 7(a) Manufacturers’ Access to Revolving Credit (MARC) loan program to offer working capital for small businesses engaged in manufacturing that the agency said would provide “maximum flexibility and minimal red tape.” The MARC loan limit is $5 million, with the SBA guaranteeing 85% of loans up to $150,000 and 75% for loans above that up to the maximum.
Another new SBA initiative heading into 2026 is to waive most loan fees for small manufacturers. That means for 7(a) loans of up to $950,000, the upfront fee will be 0%. For all 504 manufacturing loans, the upfront fee and annual service fee will each be 0%. These new, reduced fees went into effect on Oct. 1 and run through Sept. 30.
The waiving of some loan fees is a partial reversal of the SBA’s efforts to reinstitute fees for a wide variety of its loan products. Earlier in 2025, the SBA reinstated higher fees the SBA had traditionally imposed or allowed before the onset of the Covid-19 pandemic.
Why? The SBA’s 7(a) program was in the red as loan fees dropped and loan defaults increased. Those findings, and others, came from a detailed risk assessment by the SBA of its 7(a) portfolio through June 30, 2024, obtained by The Business Journals as part of a Freedom of Information Act request.
The SBA and the Department of Labor in July 2025 also announced a memorandum of understanding that would increase cross-collaboration to help support manufacturing. That means connecting the SBA’s capital and contracting tools with the Labor Department’s workforce-development infrastructure.
In May, the SBA launched an online tool intended to connect U.S. manufacturers, suppliers and producers with businesses looking to source American products and services. That effort, titled the Make Onshoring Great Again portal, provides entry to three databases — from Thomasnet, IndustryNet and Connex — that offer American-company-specific lists curated in partnership by those three organizations with the SBA. The SBA has made access to the databases free of charge for businesses as part of the agency’s larger push to boost American manufacturing.