504 Credit Risk Management Improvement Act of 2025

S. 2659 would enhance the Small Business Administration's oversight of the Section 504 loan program, which helps small businesses finance major equipment and facilities. The bill would require the SBA's Office of Credit Risk Management to conduct regular reviews of loan files after closing, supervise the nonprofit lenders that deliver these loans more closely, and submit annual reports to Congress analyzing portfolio risks by industry and lender size. To fund these oversight activities without additional taxpayer cost, the bill would authorize the SBA to charge participating lenders a small fee capped at one basis point (one-hundredth of one percent) of their loan portfolios, scaled according to lender size.

The bill would also require the SBA to clarify environmental review requirements for lenders within six months, addressing confusion created by recent regulatory changes. Supporters argue these measures would reduce mistakes and protect taxpayer dollars by strengthening guardrails on how loans are managed. The bill is currently under consideration by the Senate Committee on Small Business and Entrepreneurship, which held hearings in September 2025.