Notice2025-19072
Development Company Loan Program-Job Creation and Retention Requirements; Additional Areas for Higher Portfolio Average
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 30, 2025
Issuing agencies
Small Business Administration
Abstract
The U.S. Small Business Administration (SBA) is changing the job creation or retention requirements under its Development Company Loan Program (504 Loan Program) by increasing the dollar amounts used in calculating the number of jobs that must be created or retained for each 504 Project and for the portfolio average of each Certified Development Company.
Full Text
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<title>Federal Register, Volume 90 Issue 187 (Tuesday, September 30, 2025)</title>
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[Federal Register Volume 90, Number 187 (Tuesday, September 30, 2025)]
[Notices]
[Pages 47117-47118]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-19072]
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SMALL BUSINESS ADMINISTRATION
[Docket No.: SBA-2025-0135]
Development Company Loan Program--Job Creation and Retention
Requirements; Additional Areas for Higher Portfolio Average
AGENCY: Small Business Administration.
ACTION: Notification of changes to Development Company Program; request
for comments.
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SUMMARY: The U.S. Small Business Administration (SBA) is changing the
job creation or retention requirements under its Development Company
Loan Program (504 Loan Program) by increasing the dollar amounts used
in calculating the number of jobs that must be created or retained for
each 504 Project and for the portfolio average of each Certified
Development Company.
DATES: SBA must receive comments by December 1, 2025.
ADDRESSES: You may submit comments, identified by Docket No. SBA-2025-
0135, by any of the following methods:
(1) Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>,
following the instructions for submitting comments; or
(2) Mail/Hand Delivery/Courier: U.S. Small Business Administration,
Greg Suryadi, Finance and Loan Specialist, Office of Financial
Assistance, 409 3rd Street SW, Washington, DC 20416.
SBA will post all comments on <a href="https://www.regulations.gov">https://www.regulations.gov</a>. If you
wish to submit confidential business information (CBI) as defined in
the User Notice at <a href="https://www.regulations.gov">https://www.regulations.gov</a>, you must submit such
information to U.S. Small Business Administration, Attn: Greg Suryadi,
Finance and Loan Specialist, 409 3rd Street SW, Washington, DC 20416,
or send an email to <a href="/cdn-cgi/l/email-protection#6b0c190e0c0419021e1845181e19120a0f022b18090a450c041d"><span class="__cf_email__" data-cfemail="ee899c8b89819c879b9dc09d9b9c978f8a87ae9d8c8fc0898198">[email protected]</span></a>. Highlight the
information that you consider to be CBI and explain why you believe SBA
should hold this information as confidential. SBA will review your
information and determine whether it will make the information public.
Applicability Date: The job creation or retention requirements that
are described in this document will apply to all 504 loans that are
approved under the 504 Loan Program on or after October 1, 2025.
FOR FURTHER INFORMATION CONTACT: Greg Suryadi, Finance and Loan
Specialist, U.S. Small Business Administration, Office of Financial
Assistance, telephone: (202) 205-6806 or email:
<a href="/cdn-cgi/l/email-protection#f0978295979f82998583de83858289919499b0839291de979f86"><span class="__cf_email__" data-cfemail="8ee9fcebe9e1fce7fbfda0fdfbfcf7efeae7cefdecefa0e9e1f8">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: The 504 Loan Program is an SBA financing
program authorized under Title V of the Small Business Investment Act
of 1958 (SBI Act), 15 U.S.C. 695 et seq. The purpose of the 504 Loan
Program is to foster economic development and to create or preserve job
opportunities in both urban and rural areas by providing long-term
financing for small business concerns. See section 501(a) of the SBI
Act, 15 U.S.C. 695(a). Under the 504 Loan Program, loans are made to
small business applicants by certified development companies (CDCs),
which are certified and regulated by SBA to promote economic
development within their community. In general, a project in the 504
Loan Program (a 504 Project) is financed through:
<bullet> A loan obtained from a private sector lender with a senior
lien covering at least 50 percent of the project cost;
<bullet> A loan obtained from a CDC (a 504 Loan) with a junior lien
covering up to 40 percent of the total cost (backed by a 100 percent
SBA-guaranteed debenture); and
<bullet> A contribution from the Borrower of at least ten percent
equity.
To qualify for financing under the 504 Loan Program, each 504
Project must satisfy one of the economic development objectives or
public policy goals set forth in sections 501(d)(1) through (3) of the
SBI Act. Under section 501(d)(1), a Project is eligible for 504
financing if it creates job opportunities within two years of
completion of the Project or if it preserves or retains jobs
attributable to the Project. Section 501(e)(1) of the SBI Act required
each 504 Project to create or preserve one job for every $65,000
guaranteed by SBA; in the case of a small manufacturing Project, the
amount was $100,000. Under section 501(e)(2) of the SBI Act, if the
Project was eligible for financing under one of the objectives or goals
set forth in section 501(d)(2) or (3), the Project did not need to
satisfy the job creation or preservation criteria described section
501(e) provided that the CDC's overall portfolio of outstanding
debentures met or exceeded the job creation or preservation criteria of
one job for every $65,000 guaranteed by SBA. In addition, under section
501(e)(3) of the SBI Act, for projects in Alaska, Hawaii, state-
designated enterprise zones, empowerment zones and enterprise
communities, labor surplus areas (as determined by the Secretary of
Labor), and for other areas designated by SBA, the CDC's portfolio did
not have to average more than $75,000 per job created or retained. See
(Per the SBI Act loans for projects of small manufacturers are excluded
from the overall portfolio calculations.)
The SBI Act authorizes SBA to develop the job creation or job
preservation criteria that apply to the 504 Loan Program. See section
501(d) of SBI Act. SBA's regulations provide that ``[a] Project must
create or retain one Job Opportunity per an amount of 504 loan funding
that will be specified by SBA from time to time in a Federal Register
notice.'' 13 CFR 120.861. SBA's regulations also provide that ``[a]
CDC's portfolio must maintain a minimum average of one Job Opportunity
per an amount of 504 loan funding that will be specified by SBA from
time to time in a Federal Register notice.'' 13 CFR 120.829(a).
In 2018 SBA changed the job creation or retention requirements
under the 504 Loan Program by increasing the dollar amounts used in
calculating the number of jobs that must be created or retained for
each 504 Project and for the portfolio average of each Certified
Development Company, and designated Opportunity Zones as additional
areas for which the higher portfolio average described in section
501(e)(3) of the SBI Act. See 83 FR 55224 (November 2, 2018). As a
consequence of these changes, to satisfy the economic development
objectives or public policy goals set forth in sections 501(d)(1)
through (3) of the SBI Act, each 504 Project had to create or preserve
one job for every $75,000 guaranteed by SBA; in the case of a small
manufacturing Project, the amount was $120,000. Further, if the Project
was eligible for financing under one of the objectives or goals set
forth in section 501(d)(2) or (3), the Project did not need to satisfy
the job creation or preservation criteria described in section
501(e)(1) provided that the CDC's overall portfolio of outstanding
debentures met or exceeded the job creation or preservation criteria of
one job for every $75,000 guaranteed by SBA. Finally, for projects in
Alaska, Hawaii, State-designated enterprise zones, empowerment zones
and enterprise communities, labor surplus areas (as determined by the
Secretary of Labor), and for other areas designated by
[[Page 47118]]
SBA, which include Opportunity Zones (as described by section 13823 of
the Tax Cuts and Jobs Act of 2017, Public Law 115-97), the CDC's
portfolio could average not more than $85,000 per job created or
retained.
In 2023 SBA again changed the job creation or retention
requirements under the 504 Loan Program by increasing the dollar
amounts used in calculating the number of jobs that must be created or
retained for each 504 Project and for the portfolio average of each
CDC. See 88 FR 30379 (May 11, 2023). Consequently, under current
requirements, to satisfy the economic development objectives or public
policy goals set forth in sections 501(d)(1) through (3) of the SBI
Act, each 504 Project must create or preserve one job for every $90,000
guaranteed by SBA; in the case of a small manufacturing Project, the
amount is $140,000.
Further, under current requirements, if the Project is eligible for
financing under one of the objectives or goals set forth in section
501(d)(2) or (3), the Project need not satisfy the job creation or
preservation criteria described in section 501(e)(1) provided that the
CDC's overall portfolio of outstanding debentures meets or exceeds the
job creation or preservation criteria of one job for every $90,000
guaranteed by SBA. Finally, under current requirements, for projects in
Alaska, Hawaii, state-designated enterprise zones, empowerment zones
and enterprise communities, labor surplus areas (as determined by the
Secretary of Labor), and for other areas designated by SBA, which
include Opportunity Zones (as described by section 13823 of the Tax
Cuts and Jobs Act of 2017, Public Law 115-97), the CDC's portfolio may
average not more than $100,000 per job created or retained.
Although SBA recently increased the job creation or retention
standards for the 504 Loan Program, the Consumer Price Index for All
Urban Consumers has increased 5.4 percent from May 2023 through August
2025 according to the Bureau of Labor Statistics of the U.S. Department
of Labor. In addition, economic uncertainty and an increase in the
costs of goods due to international trade relations and supply chain
disruptions have increased construction costs, inventory costs and
impacted the cost of job creation and retention. In 2024, 77 percent of
small businesses reported rising costs for goods, services and wages
according to the Federal Reserve's Small Business Credit Survey. Rising
energy and fuel costs due to factors like geopolitical events and
increased demand contributed to increased costs of goods and impacted
shipping expenses. Supply chain disruptions, stemming from various
factors including geopolitical tensions and extreme weather events,
continue to challenge small businesses. Materials scarcity, shipping
delays and higher transportation costs contribute to increased
operation expenses. Rising wages, driven by factors like labor
shortages, increase the jobs of job creation and job retention.
Commercial insurance rates have generally increased in recent years,
increasing the cost to provide employee benefit packages. This
combination of increasing operating costs, ongoing supply chain
disruptions, a tight labor market requiring competitive wages and
benefits, rising insurance costs and the cost to train employees on AI
technology advances have impacted the dollar per job costs for business
for employee retention, job creation and work force development
training.
Furthermore, due to the Administration's focus on HUB Zones, labor
surplus areas and other specialty zones, the Administrator is resetting
the adjusted dollar per job for that category to align with the
manufacturing and energy public policy goal dollar per job.
Accordingly, pursuant to 13 CFR 120.829(a) and 120.861, SBA is
modifying the job opportunity requirements as follows:
(1) A Project must create or retain one job opportunity per $95,000
guaranteed by SBA except that, in the case of a Project of a small
manufacturer or a project that meets an energy public policy goal, the
Project must create or retain one job opportunity per $150,000
guaranteed by SBA.
(2) For Projects that are eligible under 13 CFR 120.862, ``Other
economic development objectives,'' a CDC's portfolio must reflect an
average of one job opportunity for every $150,000 guaranteed by SBA;
and (3) For Projects in Alaska, Hawaii, state-designated enterprise
zones, empowerment zones and enterprise communities, labor surplus
areas (as determined by the Secretary of Labor), and for other areas
designated by SBA (which include Opportunity Zones), the CDC's
portfolio may average not more than $150,000 per job created or
retained.
SBA invites public comments on these new job creation or
preservation standards and the designation of additional areas for
application of the higher portfolio average described above. Please
clearly identify paper and electronic comments as ``Public Comments on
504 Loan Program's Job Opportunity Requirements, Docket No. SBA-2025-
0135'' and submit them by one of the methods identified in the
ADDRESSES section of this document.
SBA will consider the comments and determine whether any revisions
are necessary.
Authority: 15 U.S.C. 695(d); 13 CFR 120.829(a) and 120.861.
Kelly Loeffler,
Administrator.
[FR Doc. 2025-19072 Filed 9-29-25; 8:45 am]
BILLING CODE 8026-09-P
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