What the New SBA Loan Increase Means for Entrepreneurs

A federal decision to double the lifetime limit on two key Small Business Administration (SBA) loan programs reflects just how difficult the current environment has become for America’s entrepreneurs, according to Babson Finance Professor Richard Bliss.

“This is probably the toughest time I’ve seen in the last 20 years,” Bliss said. Rising costs, economic uncertainty, hiring challenges, and rapid technological changes have combined to create unprecedented pressure on America’s small businesses.

“The SBA is trying to do its best to help small businesses grow, expand, and gain access to capital,” said Bliss, who is part of the Babson team responsible for the Goldman Sachs 10,000 Small Businesses program. The $750 million initiative provides entrepreneurs with a free business education, mentoring, networks, and access to capital. Bliss, who serves as national academic director of the program, said nearly 19,000 small business owners have graduated since its 2010 launch.

The SBA Loans, Explained

Under the change, eligible business owners can now borrow up to $10 million in combined lifetime SBA financing by pairing the agency’s two primary loan programs—the flexible 7(a) loan program and the asset-focused 504 loan program. Previously, borrowers were effectively limited to $5 million.

But Bliss cautions that the increase is more nuanced than it first appears. SBA loans are designed primarily for businesses that have exhausted more conventional financing options. Applicants must meet eligibility requirements based on business size and industry, pay higher fees than many traditional loans, and navigate a more extensive application process.

The 7(a) program can be used for working capital, hiring, and other operating expenses, while 504 loans are limited to long-term assets such as owner-occupied real estate and equipment. To reach the new $10 million combined cap, borrowers must first obtain a 7(a) loan before adding a 504 loan.

Challenges on Main Street

Even so, Bliss says expanding access to financing could provide an important lifeline. Inflation, elevated interest rates, customer pullbacks, tariff uncertainty, hiring challenges, and pressure to invest in artificial intelligence have made running a small business more difficult. Government contractors also have faced disruption as federal agencies undergo significant changes.

“When you talk to small business owners and you drill down on things, they are feeling like they’re just not getting there,” Bliss said. “There’s just a lot of things in the air now that make it really challenging.”

National surveys support Bliss’s assessment. More than half of small business owners cited inflation as their biggest challenge during the first half of 2026, according to the U.S. Chamber of Commerce’s Small Business Index. The National Federation of Independent Business also found that earnings trends fell in June, with 27% of owners citing weaker sales as the primary reason profits declined.

Despite those challenges, entrepreneurs continue to display a defining characteristic: optimism. Americans filed 5.7 million applications to start businesses last year—the highest annual total since the U.S. Census Bureau began tracking the data two decades ago. Applications continued to rise during the first half of this year.

A survey of 1,218 Goldman Sachs 10,000 Small Business participants conducted by Babson College and David Binder Research in February found that 80% of owners are optimistic about the current trajectory of their small business, while 76% have plans to grow their business within the next year. 

“To even be a small business owner, you have to be optimistic,” Bliss said. “If you assessed everything on the numbers and probability, nine out of 10 people would never embark on owning, buying, or starting a small business.”