Congress Set to Boost 504 Loan Limits

The House Small Business Committee recently passed legislation that will increase the maximum size of 504 loans to $2 million, and raise the loan limit for manufacturing businesses to $4 million. A similar bill passed the Senate Small Business Committee in July, and compromise legislation could be voted into law within the next few months.

The bill allows small manufacturers to obtain SBA-guaranteed loans of up to $4 million through the 504 program. The previous loan limit for the SBA-backed part of a 504 financing package was $1 million to $1.3 million, depending on the type of project.

"The small business economy, and the entire economy, cannot succeed without a sound manufacturing base," said House Small Business Committee chairman Don Manzullo.

The legislation also increases 504 loan size limits for other types of small businesses. The House version doubles the regular SBA-backed loan maximum to $2 million, and increases the amount of money available for projects that fulfill a public policy purpose -- such as expanding minority business development -- to $2.5 million. The Senate version increases these limits to $1.5 million and $2 million, respectively.

Both bills must still pass full votes in the Senate and House, but compromise legislation could be voted into law within the next few months.