Loan Calculator

The information provided by these calculators is for illustrative purposes only and accuracy is not guaranteed. The default figures shown are hypothetical and may not be applicable to your individual situation. Be sure to consult a BLP financial professional prior to relying on the results.

This calculator does not have the ability to pre-qualify you for any loan program. Qualification for loan programs may require additional information such as credit scores and cash reserves which is not gathered in this calculator. Information such as interest rates and pricing are subject to change at any time and without notice. This calculator does not calculate the Annual Percentage Rate or Average Prime Offer Rates. BLP does not guarantee any of the information obtained by this calculator.

New SBA 504 Rules Simplify Construction Projects and Increase Flexibility - BLP - Business Lending Partners

21157

wp-singular,post-template,post-template-elementor_header_footer,single,single-post,postid-21157,single-format-standard,wp-theme-onyx,wp-child-theme-onyx-child,mkd-core-2.1,mikado-core-2.1,eio-default,ajax_fade,page_not_loaded,,onyx child-child-ver-1.0.0,onyx-ver-3.4.2, vertical_menu_with_scroll,smooth_scroll,side_menu_slide_from_right,elementor-default,elementor-template-full-width,elementor-kit-8101,elementor-page elementor-page-21157

New SBA 504 Rules Simplify Construction Projects and Increase Flexibility

As of October 1, 2025, the Small Business Administration (SBA) introduced two important updates to the 504 loan program that make construction projects more flexible and easier to structure. These changes are especially beneficial for borrowers who self-perform construction and for projects with variable costs.

More Flexibility for “Do-It-Yourself” Construction

The SBA updated its requirements for substantiating costs when borrowers perform their own construction work, aligning the 504 program more closely with recent 7(a) guidance. Borrowers may now verify DIY construction costs using one of the following:

Two competing bids from unaffiliated contractors
One estimate from a third-party construction management firm
Verification from the Third-Party Lender’s internal construction management department, if the lender routinely manages construction for similar non-SBA loans

These options simplify documentation while maintaining appropriate oversight.

Higher Construction Contingency

The allowable construction contingency for SBA 504 projects has increased from 10% to 15% of total construction costs, providing added flexibility to manage unforeseen expenses. The SBA also clarified how unused contingency funds must be handled at debenture funding, depending on the remaining amount.

Why This Matters

These updates reduce friction in the construction financing process and give lenders more tools to confidently structure SBA 504 projects. BLP is available to support lending teams in applying these changes and identifying opportunities within their construction pipeline.

Interested in SBA 504 financing or have questions about the latest SBA updates? Connect with the BLP team to learn how we can support your lending strategy—contact Wesley Walsh (Southern Wisconsin) or Grace Kieckbusch (Northern Wisconsin) today!

CONTACT US FOR YOUR BUSINESS LENDING NEEDS

Grace Kieckbusch

Vice President & Loan Officer

Grace Kieckbusch is a commercial lender who loves finding financing solutions that help small businesses thrive. A Magna Cum Laude graduate of UW–Parkside, she began her career at BLP after interning with the team during college.

Green Bay Office920.384.0385 Grace@blp504.org

Wesley Walsh

Vice President & Loan Officer

Wesley Walsh is a commercial lender passionate about helping small businesses. A Magna Cum Laude graduate of UW-Eau Claire, he’s interned at Associated Bank and worked at Tri City National Bank.

Racine Office262.898.7436 Wesley@blp504.org