The Trump administration is poised to institute a sweeping round of changes to how the Small Business Administration approves guaranteed loans of all sizes. The 416 pages of revised rules, which take effect on Oct. 1, are likely to roil small business investors, while also shrinking default rates and lessening the overall risk of SBA loans. For some borrowers, and in particular those buying businesses worth $350,000 or less, the changes will also mean more paperwork and longer waits for loan approvals, experts say.

The new standard operating procedure, or SOP, issued on Aug. 14, contains dozens of regulatory updates that will directly affect loan approval processing, particularly for loans being used to acquire businesses. That means there will likely be several weeks of confusion as loan applicants and bankers alike adjust to the new restrictions, experts told Forbes.

“It’s going to be a rocky six to eight weeks” after Oct. 1, predicts Kevin Henderson, a partner at Florida’s SMB Law Group, which specializes in advising small business buyers and sellers. “Worst-case scenario is, deals blow up,’’ he adds.

“If you are getting an SBA loan, you need to be asking yourself which SOP you would fall under,” warns Scott Oliver, who specializes in commercial finance at Indianapolis law firm Lewis Kappe. “What may be eligible for a loan closing today might not be eligible for a loan closing on Oct. 5, assuming approval was after that Oct. 1 date. It all comes down to when your loan was approved.”

The new rules are numbered SOP 50 10 8.1, meaning the Trump administration considers them an update to changes it made in SOP 50 10 8.0 in June of 2025. Henderson said last year’s new SOP was a “comprehensive rewrite” of lending rules, and this year’s update has even more significant changes that could drive down the overall number of SBA loan approvals in coming months, simply by tightening regulations and oversight.

The number of SBA 7(a) loans has already dropped in fiscal year 2026 (that ends on Sept. 30) by almost 30% from the prior fiscal year from 74,830 to 52,924 loans. The dollar value of those loans has declined a more moderate 16% from $34.9 billion to $29.4 billion. On the flip side, SBA loan default rates have also risen in recent years, in part because of pandemic-era loans that went bad but also due to more permissive SBA lending policies under President Joe Biden. Those policies have largely been reversed under the second Trump administration.

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