Changes to the SBA Loan Program Could Boost Retail Leasing

Thursday, April 24, 2025

• Mom and pop shops: Retail leasing could have just gotten a boost from yesterday’s changes to the SBA’s loan program.

• Garden state showdown: New Jersey is suing RealPage and major landlords under consumer protection laws, alleging rent price-fixing through shared non-public data.

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Editor’s Pick

Changes to the SBA Loan Program Could Boost Retail Leasing

The Small Business Administration was established in 1953 to promote small business growth through financing, advocacy, training, and emergency relief. Its primary tool is the 7(a) loan program, which guarantees a portion of qualifying loans, allowing lenders to offer more favorable terms. The agency also provides tools to streamline loan origination and servicing for lenders. This week, the Trump administration introduced changes to the SBA loan application requirements. Since small businesses are the primary tenants in many retail real estate locations, these changes could soon affect retail leasing.

Several key changes were made to the SBA loan program—some expanding access and others adding restrictions. The most significant change is that borrowers must now verify their citizenship or permanent residency. While data is limited on how many foreign citizens apply for these loans, this requirement could reduce the number of eligible companies.

Another notable change aims to speed up the loan vetting process. Borrowers are no longer required to submit tax returns and may instead use CPA-reviewed financial statements. Additionally, franchise owners will no longer need to submit franchise documentation for review, as franchises will now be treated like any other business. For partial business sales involving an SBA loan, the transaction must now be structured as a stock purchase, and sellers must personally guarantee the loan for at least two years. Minority owners are also now required to sign personal guarantees to ensure repayment, even if business ownership changes over time.

The SBA loan program is vital to the country’s small businesses. Any adjustments to it will inevitably impact the retail real estate industry that depends on them.

Overheard

New Jersey Targets RealPage Under Consumer Protection Laws

New Jersey is following eight other states and the Department of Justice in filing a lawsuit against RealPage for its rent optimization software. The state's District Attorney has filed a complaint that names RealPage and some of its largest property management clients as defendants for exchanging non-public data such as lease prices, amenities, concessions offered, property values, and housing inventory. The complaint alleges that this data sharing allowed landlords to align pricing and avoid competition and keep rents high.

New Jersey's case is similar to other cases that have been brought against RealPage except that it cites the states Consumer Fraud Act that prohibits businesses from engaging in unconscionable commercial practices, deception, fraud, false pretense, false promise, misrepresentation, or the knowing concealment, suppression, or omission of any material fact. By invoking this statute, the Attorney General aims to hold RealPage and its co-defendants accountable for practices that allegedly harmed New Jersey consumers and seeks civil penalties, restitution of ill-gotten profits, an injunction to prevent further violations. The complaint also asked for the appointment of a monitor to ensure future compliance with the law.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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