New SBA SOP Update: Refinancing Restrictions on MCAs & Factoring Agreements

Effective June 1, 2025, the Small Business Administration (SBA) is rolling out an important update to its Standard Operating Procedures (SOP) that could impact lenders, brokers, and small business borrowers.

✅ Key Change:
Under the new SOP, merchant cash advances (MCAs) and factoring agreements are explicitly ineligible for refinancing under the following SBA loan programs:

• Standard 7(a) Loans

• 7(a) Small Loans

• SBA Express Loans

• Export Express Loans

• International Trade Loans

This change narrows the scope of acceptable refinancing use cases and is likely to affect how small business debt is consolidated or restructured using SBA products.

Why it matters: If you're working with clients who currently have MCAs or factoring arrangements, this change could limit their options for improving cash flow through SBA-backed refinancing.

Mark your calendars: These changes go into effect June 1, 2025.

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