The October 1 SBA rule change, in plain terms

The SBA published a new rulebook for its lenders on August 14, 2026. It's called SOP 50 10 8.1. It applies to every loan that gets an SBA loan number on or after October 1, 2026.

One part of it rewrites how an SBA 7(a) loan can be used to buy a business. That's the part an owner should read.

Yes, if the deal fits what the rule calls a Business Expansion. Your company has to have operated for at least two full fiscal years under its current ownership. It has to buy 100% of the ownership of the other business. Both companies have to sit in the same four-digit NAICS industry group. And at least as many owners have to stand behind the new loan personally as stand behind your company's debt today.

The industry group is wider than it sounds. HVAC, plumbing and electrical contractors share one group, so an HVAC company buying an electrical contractor can count as an expansion. Roofing sits in a different group, so that same HVAC company buying a roofer would not. Where the other company is located doesn't matter.

The SBA's starting point is 10% of the project cost. On a Business Expansion, the rule lets the lender reduce that 10% or drop it.

Two conditions come with that. Your balance sheet can't show negative net worth at your last fiscal year-end. And your company needs enough cash, or a line of credit, to run both businesses after closing. When the down payment is dropped, the loan can't carry extra working capital.

Your company's numbers do. The main test is debt service coverage. Your combined cash flow has to cover the combined debt payments 1.15 times. It's measured on real past results, either your last fiscal year or the average of your last two. Projections don't count toward it.

A healthy company with clean books is a strong expansion loan. We look at where you stand on each test, and we shop lenders until the right one says yes.

Then the rule treats you differently. A first-time buyer with no existing company puts 10% down, and that can't be reduced. The same goes for an owner who hasn't finished two full fiscal years with the company yet.

The expansion path is for owners who already run a business.

It depends on when the SBA issues the loan number. Applications submitted through September 30, 2026 stay under the old rulebook. Loans that get their SBA loan number on or after October 1, 2026 fall under the new one.

The date you signed a letter of intent doesn't decide it, and neither does your closing date.

Every purchase needs an independent business valuation, and the lender orders it. The seller has to step out of the company at closing, though they can stay on as a consultant for a limited time.

A seller note counts toward the down payment only if the seller takes no payments for the life of the loan, and only up to half of it.

Omnira Partners helps you assess the acquisition, prepare the business, and identify financing partners. You can engage us for a specific acquisition or financing assignment, or as part of an ongoing operating partnership. We aren't a lender. The lender decides any SBA financing.