504 Modernization and Small Manufacturer Enhancement Act of 2025

Summary

Makes a series of targeted changes to the SBA’s Title V (504) program to modernize goals, expand support and special rules for very small manufacturers, give accredited development companies more limited closing authorities, relax certain occupancy and leasing limits for financed projects, and require SBA district offices to partner with local resource partners to provide training to manufacturing firms. It also shifts some loan file review and attorney-certification responsibilities to SBA central offices and creates reporting obligations for the Administrator. The bill adds workforce development, employee ownership, energy efficiency/renewables, disaster-area revitalization, and a focus on firms with 10 or fewer employees to the Development Company program’s policy goals; creates lower borrower contribution and collateral rules for small manufacturers and caps certain guaranteed debentures; and includes an ambiguous numeric change to a loan-size figure that needs correction. Some oversight and certification changes take effect 180 days after enactment and the Administrator must report to Congress within five years on program impacts.

• Adds workforce development, employee ownership, energy efficiency, disaster-area revitalization, and focus on firms with ≤10 employees to CDC program policy goals.
• Creates preferential borrower-contribution and collateral rules for small manufacturers and caps guaranteed debentures for their projects at 50% of project cost.
• Gives accredited/ certified CDCs limited administrative closing authorities to correct and reallocate certain loan closing items (e.g., up to 10% of project cost).
• Shifts 504 loan file review responsibility to SBA’s Office of Credit Risk Management and allows CDC‑designated attorneys to certify closings, effective 180 days after enactment.
• Relaxes occupancy/ leasing limits for new construction and existing buildings (including a 20% leasing allowance for new builds and up to 50% for acquisitions with conditions), with reporting obligations and lease-term caps.
• Requires each SBA district office to partner with at least one resource partner (SBDC, WBC, SCORE, or VBOC) to provide manufacturing outreach and training.
• Contains a drafting error replacing a $5,500,000 loan cap figure with malformed text, creating substantive ambiguity needing correction.
• Requires an SBA report to Congress within five years on the amendments’ effect on small business access to capital and whether similar leasing rules should apply to 7(a).