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119-hr-10375119th CongressWALLET

504 Modernization and Small Manufacturer Enhancement Act of 2026

Sponsored By: Representative Velázquez, Nydia M. [D-NY-7]

In Committee

Summary

This bill modernizes the SBA 504 small‑business lending program to speed closings, tighten leasing rules, expand outreach, and link loans to training. Broaden access to affordable capital for small manufacturers while requiring workforce training and stronger closing oversight.

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  • Small manufacturers and small businesses get easier access to 504 financing through a new exemption from the "credit elsewhere" test and added closing flexibilities, including the ability to reallocate up to 10% of project costs.
  • Workers and employers must show workforce development is part of eligible projects by providing at least 12 weeks of in‑house training or a contract to supply applicants who completed 12 weeks of training.
  • Certified development companies, accredited lenders, and SBA legal staff face new closing rules and oversight. The bill creates "designated attorneys" with training and malpractice insurance rules and shifts some file reviews to the SBA Office of Credit Risk Management.

The bill also requires the SBA to start a marketing and outreach plan within one year and sets new leasing limits for financed facilities, including a 20% cap on leasing of new facilities with occupancy tests and tighter rules for existing buildings.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 1 benefits, 0 costs, 2 mixed.

Faster access to 504 loans

If enacted, the bill would make it easier and faster to close many 504 loans. Accredited lender certified companies could reallocate up to 10 percent of project costs, fix names or addresses, add eligible passive companies, and change guarantor or borrower roles at closing. The bill would let designated attorneys who show a state law license, malpractice insurance, and approved training certify closings, and it would move file-review duties to the Office of Credit Risk Management starting 180 days after enactment. It would also exempt certain CDC-related financings from the SBA’s credit-elsewhere test and require the SBA to start a Title V outreach plan within 1 year.

New leasing rules for 504 properties

If enacted, the bill would change how much space a business can lease in a 504-financed property. For existing buildings, a borrower could generally lease up to 50 percent of the property. A borrower could lease up to 66 percent only after meeting extra rules, including at least 12 months of prior tenant occupancy, commitments for future occupancy, annual reviews for the first 5 years, and anti-investor certifications. Residential leases in financed properties would be capped at 1 year and commercial leases at 5 years. For new buildings, a borrower could lease up to 20 percent if they occupy at least 60 percent (50 percent for small manufacturers), plan to occupy more within 3 years, and plan to occupy 80 percent within 10 years.

Workforce training and disaster priority

If enacted, the bill would add workforce development and disaster-area revitalization as formal goals of the 504 program. Covered projects would need either an in-house training program of at least 12 weeks or a contract that supplies applicants who completed at least 12 weeks of relevant training. Disaster-area support would apply for 5 years after a qualifying disaster declaration, and the Administrator could add one-year extensions. The program would also prioritize projects that help firms with 10 or fewer employees.

Sponsors & CoSponsors

Sponsor

Velázquez, Nydia M. [D-NY-7]

NY • D

Cosponsors

  • Rep. Williams, Roger [R-TX-25]

    TX • R

    Sponsored 9/14/2026

  • Rep. Tran, Derek [D-CA-45]

    CA • D

    Sponsored 9/16/2026

  • Rep. Cisneros, Gilbert Ray [D-CA-31]

    CA • D

    Sponsored 9/16/2026

Roll Call Votes

No roll call votes available for this bill.

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