SBA Loan Criteria Streamlined: New 'Main Street Parity Act' Removes Two Facility Loan Requirements

The aptly named "Main Street Parity Act" is short, but it makes a targeted change to the rules governing how small businesses can get loans to acquire, build, or expand their facilities. If you’re a business owner looking to finance a new warehouse, office park, or factory floor through the Small Business Administration (SBA), this bill affects the eligibility checklist you have to clear.

The Fine Print of Facility Financing

Under the Small Business Investment Act of 1958, the SBA offers specific loans to help businesses with "plant acquisition, construction, conversion, or expansion." This bill, found in Section 2, amends the criteria for these loans (specifically Section 502(3)(C) of the existing Act). It removes two specific clauses—(ii) and (iii)—that were previously required for a business to qualify. Think of it like taking two required items off a checklist for a mortgage application.

We don't know exactly what those removed clauses required, but their removal means whatever standards, restrictions, or hoops they imposed are now gone. For a busy contractor or a tech startup planning to buy their first commercial space, this could mean a simpler, less restrictive application process. The bill then performs necessary administrative cleanup, renumbering the remaining criteria and updating a cross-reference in Section 502(3)(B)(ii) to ensure the rest of the law still makes sense.

What This Means for Main Street

This isn't a massive overhaul of the SBA program, but it’s a targeted streamlining effort. If you’re a small business owner—say, a manufacturer trying to finance a larger facility to meet increased demand—the goal here appears to be making it easier to qualify for the loan. The intent is likely to increase access to capital for physical expansion, which should, in theory, boost local economies.

However, it also raises a question: Why were those two clauses there in the first place? They likely served as some form of safeguard or specific requirement, perhaps related to environmental standards, local economic impact, or specific usage restrictions. By removing them, the process is streamlined for the SBA, but it also removes whatever oversight or qualification those clauses demanded. While simplification is good for business, we need to watch how the SBA implements this change to ensure the relaxed criteria don't lead to issues down the road, particularly if those clauses were protecting specific interests or ensuring loan quality.