The U.S. Small Business Administration (SBA) is changing the names of its two most popular loan programs for smaller companies.
Going forward, the 7(a) loan will be called the SBA Advantage Loan Program while the 504 loan will be known as the SBA Grow Loan Program. The agency says the rebranding came after talking to lenders; the loans’ new names should “better reflect their purposes and improve borrower understanding of SBA’s programs.”
But how the loans work will remain the same. Advantage Loans will, like 7(a), be used mostly for working capital while Grow Loans will help fund real estate, equipment and other capital investments.
“There is no substantive change to either loan program at this time; today’s announcement only impacts the programs’ names. All policies, procedures and forms are still in effect,” the SBA announced in a recent memo.
Transitioning over to the new monikers may take time.
“SBA expects a transition period, during which time the website, regulations, Standard Operating Procedures, forms and vendor software will be updated,” the agency wrote. “Due to the gradual introduction of the new names, some documents may continue to use the terms 7(a) and 504 during this transition period.”