HR 10375: 504 Modernization and Small Manufacturer Enhancement Act of 2026

HR 10375 in plain English: This bill expands the SBA 504 Loan Program, which helps small businesses finance expansion or modernization through certified development company intermediaries. It adds new qualifying objectives, increases leasing flexibility for renovated buildings, and reduces certain lending requirements for intermediaries.

Stated purpose

This bill aims to expand and modernize the SBA 504 Loan Program by adding new qualifying objectives, simplifying loan closing procedures, and giving small businesses more flexibility in how they use buildings financed through the program.

Key points

• Adds workforce development and disaster-area revitalization as qualifying goals for SBA 504 loan assistance.
• Allows intermediaries to correct loan documents or reallocate up to 10% of project costs to help close 504 loans.
• Permits small businesses to lease up to 66% of a renovated building to tenants if they occupied it for 12 consecutive months before the project.
• Removes the requirement for intermediaries to prove they cannot obtain credit elsewhere before receiving 504 loans.

Arguments supporters make

• The bill removes outdated barriers so more small businesses—especially the smallest ones with 10 or fewer employees—can access affordable capital they previously couldn't qualify for.
• Adding workforce training and disaster recovery as qualifying goals directs lending toward communities and workers that need economic support the most.
• Streamlining the loan closing process reduces paperwork delays and administrative errors, making the program faster and less costly for both lenders and small business borrowers.

Arguments opponents make

• Expanding who qualifies and relaxing lending requirements could expose the SBA loan program to greater financial risk and potential losses for taxpayers if more borrowers default.
• Allowing businesses to lease up to 66% of a renovated building to outside tenants could shift the program away from its core purpose of supporting owner-occupied small business facilities.
• Exempting intermediaries from proving they cannot obtain credit elsewhere may reduce the program's focus on businesses that truly have no other financing options, potentially subsidizing those who don't need government help.

Tradeoffs

Broadening eligibility and easing procedures helps more small businesses access capital but may stretch program resources and increase risk; allowing greater tenant leasing gives small business owners more financial flexibility but moves the program further from its original owner-occupancy focus.

Current status in Congress: Passed House.

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