Small Business Administration (SBA) in Transition

Policy Reform, Structural Changes, and Strategic Refocusing in 2025

In 2025, the SBA has undergone significant restructuring under the leadership of newly appointed Administrator Kelly Loeffler. On March 21, 2025, the SBA announced a 43% workforce reduction, eliminating approximately 2,700 positions to return to pre-pandemic staffing levels and cutting programs initiated during the previous administration, such as the “Green Lender Initiative” and diversity-focused initiatives.

President Trump also proposed that the SBA take over management of the federal student loan portfolio, previously handled by the Department of Education, as part of his plan to dismantle the latter. The agency is also reinstating stricter underwriting standards, ending the “Do What You Do” policy that allowed lenders to use their own guidelines.

On May 1, the Senate and House Small Business Committees introduced the Made in America Manufacturing Finance Act (MAMFA), proposing to raise the SBA loan cap to $10 million for U.S.-based small manufacturers classified under NAICS codes 31, 32, or 33, (encompassing the Manufacturing sector) while keeping the $5 million cap for all other industries. The legislation aims to strengthen domestic manufacturing in key industrial sectors and improve competitiveness by expanding access to capital to invest in growth, equipment, and workforce.

Regarding financial updates, the SBA has announced a revision (5000-865758) to the fee structure for Fiscal Year 2025, for loans approved March 27, 2025, through and including September 30, 2025. The SBA’s updated 7(a) loan fee structure includes an annual service fee of 0.55% on the guaranteed portion of the loan balance, which must be paid by lenders and cannot be passed on to borrowers. Additionally, the SBA will charge an upfront fee of 0.25% for all short-term loans (12 months or less). Fees for loans with a maturity that exceeds 12 months are as follows:

• For loans of $150,000 or less, 2% of the guaranteed portion
  • The Lender may retain no more than 25% of the fee (i.e., at least 1.5% must be remitted to SBA).

• For loans of $150,001 to $700,000, 3% of the guaranteed portion.
• For loans of $700,001 to $5,000,000, 3.5% of the guaranteed portion of the loan up to and including $1,000,000, plus 3.75% of the guaranteed portion over $1,000,000.