Sponsors (4)
The bill lets small businesses use SBA 7(a) loans to finance software and AI tools—boosting access to digital capabilities and efficiency—while increasing federal lending exposure, the risk of loans being used for recurring non-capital expenses, and potential workforce disruption from automation.
Small business owners can use SBA 7(a) loans to pay for modern business and cloud software (including AI-enabled tools), reducing upfront capital needs and making it easier to adopt digital systems that improve efficiency and reduce operational errors.
Small business owners and local businesses may retain or create jobs as firms scale and compete more effectively with improved digital capabilities funded by these loans.
Taxpayers could face modestly higher federal lending exposure and contingent fiscal costs because the 7(a) program would cover a broader set of expenditures.
Small business owners risk using loans for routine, commercially available software subscriptions, which could lead to overborrowing for non-capital or recurring expenses and increase debt strain for some borrowers.
Tech workers and employees of small firms may face accelerated automation and resulting workforce disruption or increased reskilling needs as AI-enabled tools are more widely adopted with financed support.
Based on analysis of 2 sections of legislative text.
Allows SBA 7(a) loans to finance business software, cloud services, and AI-enabled tools for routine business operations while excluding R&D funding.
Adds a new allowable use for SBA 7(a) loans to finance business software, cloud services, and related technologies — including tools that use artificial intelligence — for routine business operations (payroll, HR, sales, accounting, inventory, records, expense tracking, etc.). It clarifies that the change does not authorize research & development financing, does not change prior loan permissibility, and does not narrow the statutory definition of working capital. The change simply expands what small businesses can borrow for under existing SBA 7(a) authority; it does not create a new grant program, appropriate funds, or alter loan terms beyond permitting these uses.
Official title: Small Business Technological Advancement Act
Introduced February 4, 2025 by Mark Alford · Last progress July 13, 2026