The Small Business Administration’s (SBA) 504 program is expected to run out of funds to support new small business loans as early as September 3. Classified as the SBA’s second largest loan program its purpose is to increase the lending capacity of lenders and provide small businesses with reliable access to capital. Since 2016 the budget for new 504 lending has been set at $7.5 billion. Through Aug. 20, the SBA has reported 504 originations totaling this amount, which is above the record $5.8 billion for the full 2020 fiscal year. Funding for new 504 loans will reach its cap given the rise in demand amid the pandemic and will likely not receive more funding until the new fiscal year begins October 1.
To learn more about small business loan securitizations and how they support small businesses with access to credit, check out this SFA Research Corner.