MANAHAWKIN, N.J. - eTradeWire -- The members of Southern Ocean County Chamber of Commerce have relied on the US Small Business Administration (SBA) for business advancement or to assist in times of financial need. Recently, the SBA has introduced a series of new measures aimed at tightening oversight and mitigating fraud in its loan programs. These changes impact both the application process and fees for small-business owners seeking financial assistance. After taking part in recent webinars regarding the new rules, we have pointed out key changes that may affect our local business community.

Citizenship Verification

A new provision in all SBA loan applications now requires citizenship verification. Lenders must confirm that applicant businesses are not owned, in whole or in part, by an undocumented immigrant. The agency states that this measure ensures legal, eligible applicants have access to SBA programs.

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Date-of-Birth Verification & Fraud Alerts

To combat identity fraud, the SBA now requires age and date-of-birth verification for all applicants. The new process aims to prevent fraudulent applications submitted using the identities of children or deceased individuals. Automatic fraud alerts will flag applications from individuals claiming to be younger than 18 or older than 115 years old, increasing scrutiny on potentially suspicious applications.

Higher Loan Fees & Financial Adjustments

Small-business owners seeking SBA loans will now face higher fees, effective for all new loans issued after March 27. This change follows a substantial cash flow deficit in the SBA's 7(a) loan program in 2024, driven by previous fee reductions and an increase in defaults on older loans.

Additionally, the SBA has discontinued its Hardship Accommodation Plan (HAP), meaning businesses will see higher repayment obligations on COVID Economic Injury Disaster Loans. The temporary relief program initially allowed borrowers to enroll for reduced payments over six months but was extended for up to five enrollment periods. With its conclusion, borrowers will now return to full repayment obligations.

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Workforce & Program Cuts

The SBA has announced a 43% reduction in its workforce, eliminating what the agency describes as "non-essential" roles. Alongside staffing cuts, the agency has also put its green-lender initiative on hold, signaling a shift in its priorities.

These updates reflect the SBA's push to strengthen financial controls and improve loan program sustainability. While some changes aim to curb fraud, others—such as fee increases and workforce reductions—may pose challenges for small-business owners navigating the economic landscape. As these measures take effect, borrowers should stay informed and seek guidance to ensure compliance and financial preparedness.It is advised that any small-business owner affected by these changes, may find it helpful to consult a financial advisor orSBA (https://www.sba.gov/)representative to explore available support options.