For Polish-American entrepreneurs looking to acquire an existing business—such as a bakery, a remodeling company, or a transport business—this is one of the most important changes this fall. The Small Business Administration announced new lender instructions on August 14, 2026, which took effect on October 1. Below, we outline the changes that law firm summaries indicate apply to business buyers.
To whom and since when do the new rules apply
Instruction SOP 50 10 8.1 (Lender and Development Company Loan Programs) covers the 7(a) and 504 programs. According to the PilieroMazza law firm, it applies to applications assigned an SBA loan number on or after October 1, 2026; earlier applications are subject to the previous version, SOP 50 10 8.0. The lender determines which version of the rules applies to a specific application.
Key changes in business acquisitions
Law firm reviews (Starfield & Smith, PilieroMazza) indicate that the following rules, among others, have been changed:
- Higher Debt Service Coverage (DSC) ratio. For business acquisitions, a 1.25 to 1 ratio is required instead of the previous 1.15. The ratio must be demonstrated based on the company’s historical performance—from the last fiscal year or a two-year average. Projections cannot replace it.
- QoE report starting at $3 million. For acquisitions or expansions where the purchase price (excluding owner-occupied real estate) is $3,000,000 or more, a Quality of Earnings report is required, which is an independent assessment of the company’s actual earnings.
- End of the “small loan path”. Small 7(a) loans can no longer be used in any ownership change transaction, regardless of the amount. Every acquisition goes through the full procedure, which typically means more paperwork and a longer timeline.
- At least 10% equity injection. According to the law firm, this cannot be reduced or eliminated for business acquisitions. Seller debt, standby debt, and minority investor equity can together cover at most half of the required injection.
- Repayment term. A 10-year term is specified for ownership change transactions (or a weighted average if real estate is also being financed).
- Seller consulting. The maximum period a seller may remain as a consultant has been extended to 24 months (from 12).
Citizenship and residency of owners
PilieroMazza draws attention to an issue of particular importance to the Polish-American community. According to their review, instruction 8.1 restricts financing to applicants who are U.S. citizens or U.S. nationals with their primary residence in the United States, and corporate owners must be registered in the U.S. Previously, according to the same review, green card holders could be full owners or guarantors. A similar change was already described in an SBA notice from February, effective March 1, 2026. If you hold permanent resident status rather than citizenship, you must check how this rule affects your specific business ownership structure before starting discussions with a bank.
What this means in practice
Buyers should start with the company’s historical financial results: the last two tax returns and financial statements. If cash flows are borderline, talking to a bank at this stage is less costly than facing a rejection after a month of work. It is also worth calculating the equity injection in advance and agreeing with the seller on what portion of the price can be seller financing. Every bank has its own internal requirements, often stricter than the SBA’s, so final terms must be confirmed with the lender.
What could not be verified
The original SOP 50 10 8.1 PDF document was not readable at the time this text was prepared, so the details above come from law firm reviews, and the SBA Information Notice (5000-880695) itself only confirms the issuance of the instruction and the October 1, 2026 effective date. [TO BE COMPLETED: verification of SOP section numbers and exact citizenship rules within the text of the instruction.] This text is for informational purposes and does not constitute legal or financial advice.
Accountants, financial advisors, and Polish service businesses that can help prepare loan documentation can be found in the financial category of the Polish Pages directory.
