SOP 50 10 8.1: What Changed for Feasibility Studies

Three documents carry the name SOP 50 10 8.1. SBA issued the first on August 14, 2026. It replaced that text on September 25 with a version subtitled Technical Policy Updates, and that second text is the one that took effect on October 1, 2026 for applications received by SBA on or after October 1, 2026. The third document is the one most people have read: a summary of the August draft, written before the reversals, still ranking in search. This note works from the text in force.

The headline is simple enough to state in a sentence. A lender financing the purchase of an operating business can no longer rely on the buyer's forecast to prove the loan will be repaid; the test is the business's own trailing earnings, at a higher floor than before. Everything else in the edition, from the equity rules to the quality-of-earnings threshold to the fee waivers, sits around that shift. For the people who prepare market and feasibility analysis for these credits, it changes the question the analysis has to answer.

Three texts, one in force

The sequence matters because so much published commentary describes the wrong text. SBA's August issuance notice announced the new edition and said it would apply to applications issued a loan number on or after October 1. Six weeks later the Technical Updates notice said the revised version "supersedes the version previously published but not yet effective" and keyed applicability to applications received by SBA on or after that date. Applications submitted through September 30, 2026 stay under SOP 50 10 8. No loan was ever underwritten to the August wording.

Where the two 8.1 texts differ, the Technical Updates notice is the only primary record of what August said, because SBA no longer posts the August file. The table below shows the reversals that notice describes. Where it is silent, this note does not guess at the August position.

Appendix 15 in four categories

Every 7(a) change of ownership now belongs to one of four categories, and the category sets the floor. An Initial Acquisition is the default: a new majority or largest owner who was not an owner before, or an employee of fewer than 24 months. A Business Expansion is an operating company with two full fiscal years under its current owners buying another business in the same four-digit NAICS group. An Owner Buyout is existing owners, or employees of at least 24 months, buying out a departing partner; an outsider may take less than half and may not become the largest holder. ESOP and cooperative purchases of a controlling interest make up the fourth.

The sentence that does the work says the lender must evaluate the buyer's projections but may not rely on them to meet the coverage requirement. Two doors stay open. If the target is an owner-occupied special purpose property, the kind of building that is worth little without the business inside it, and the appraised value fully supports the purchase price, the lender may underwrite on two years of projections, must still compute and record the historical ratio, and must file an analysis of the variance between the two. And if a purchase has no clear continuity of operations, the lender may treat it as a start-up, with the start-up equity and projection rules. Every other acquisition is tested on the seller's numbers.

Equity: what counts and what does not

The injection is 10% of total project cost for an Initial Acquisition and cannot be reduced or waived. The same 10% applies to Business Expansion, Owner Buyout (measured on the purchase price) and ESOP and cooperative deals; for a Business Expansion or an Owner Buyout the lender may reduce or eliminate it when the balance sheet shows adequate liquidity and no negative net worth, and a loan to an ESOP buying a controlling interest carries no SBA injection requirement at all. The sources are policed more tightly than the percentage. Seller debt on full standby for the life of the loan, other full-standby debt, and a passive minority investor holding under 20% may together supply no more than half of the injection. Fees paid for education, advisory services or to a loan agent are not equity; the buyer's out-of-pocket cost for the valuation and the quality-of-earnings report can count toward it.

Two timing rules changed with it. A seller note written into the deal may be refinanced only after 36 months in place and current, and a seller may stay on as a consultant for no more than 24 months in aggregate. Seller earnouts are prohibited outright. A performance rebate paid to the buyer must go to loan principal, while a working-capital true-up written into the purchase agreement is treated as what it is, cash to run the business, and may be kept.

Valuation and quality of earnings

The number that drives due diligence is the Business Purchase Price, defined as the purchase-agreement price less the appraised value of owner-occupied commercial real estate. At $350,000 or less the lender may value the business itself unless buyer and seller are closely related; above it, an independent qualified source prepares the valuation for the lender, and a report commissioned by either party to the sale is unusable. Total acquisition debt, including a seller note not on full standby, is capped at that valuation, and any price above it must be equity.

At a Business Purchase Price of $3 million or more, an Initial Acquisition or Business Expansion also needs a quality-of-earnings report, independent and for the lender's benefit, with a cash proof that ties bank statements to the income statement and tax returns for the trailing twelve months plus the last two fiscal years. The lender must then run the coverage test on the QoE's adjusted earnings, not the seller's. Owner Buyouts and ESOP deals are exempt, and so is any acquisition of an owner-occupied special purpose property, whatever the price.

Amortization: ten years, and the one exception

A change-of-ownership loan amortizes over no more than 10 years. Real estate bought with the business is either a separate loan or a blended maturity in which only the real estate share may run to 25 years; the old rule that let the whole loan stretch to 25 years when real estate was 51% of proceeds survives only for mixed-purpose loans that are not acquisitions. The exception the Technical Updates added is narrow and specific: when the deal is an owner-occupied special purpose property with the business operating from it, the property cannot be separated from the business, and 85% or more of the use of total project costs is real estate, the lender may write the whole loan to 25 years. The threshold is a share of project cost, not of appraised value, which is how most summaries have it.

The 504 side

The 504 program acquired a coverage floor of its own: 1.15:1 on historical EBITDA over combined post-transaction debt service, on the last fiscal year-end or a two-year average, replacing the old one-to-one test. Where history falls short, the CDC analyzes at least two years of projections and must show the liquidity to cover any first-year shortfall. The contribution tiers are unchanged by regulation: 10%, 15% for a new business or a limited or special purpose property, 20% for both. The bank's first mortgage must still run at least seven years against a ten-year debenture and ten against a twenty- or twenty-five-year one, but the August bar on a bank amortization longer than the debenture is gone. The job test is $95,000 of debenture per job created or retained, $150,000 for small manufacturers and energy projects. And since July 4, 2026, a borrower that takes its 7(a) loan first may stack a 504 project on top, up to $10 million combined.

Fees, rates and the rural test

For loans approved October 1, 2026 through September 30, 2027, the 7(a) upfront fee is 2% of the guaranteed portion up to $150,000, 3% from $150,001 to $700,000, and 3.5% plus 3.75% above $1 million of guaranteed portion on larger loans, with the lender's annual fee at 0.55%. The upfront fee is 0% on loans of $700,000 or less to manufacturers, to the listed food supply chain industries, and to businesses in a rural area, defined as a county that the U.S. Census Bureau has defined as at least 30 percent rural. The 504 program waives both its 0.50% upfront and 0.203% annual fees for the same three groups at any loan size. Base rates for the quarter: prime at 7.00%, the SBA Optional Peg Rate at 5.00%.

The rural test is the one most operators will meet or miss. A restaurant, a hotel, a car wash or a veterinary clinic is not a manufacturer and is not in the food supply chain codes, so its only route to the waiver is the county. A feasibility study for such a project should state the county's Census rural share next to the fee assumption, because the difference on a $700,000 loan is the whole upfront fee.

Asset type by asset type

Gas stations and car washes

Both are on SBA's special purpose list, and both trade heavily as acquisitions. An Initial Acquisition of an operating station or wash is tested at 1.25:1 on trailing EBITDA, which means the market analysis has to explain the seller's fuel gallons, inside sales and wash counts rather than project the buyer's. The special purpose projection exception can apply where the real estate appraisal fully supports the price, and the 25-year amortization exception can apply where the property is 85% or more of project cost; a dated site with a cheap business attached may qualify, a high-volume operation on leased land will not. Ground-up builds are unchanged: they remain start-ups, tested on projections at the Standard 7(a) floor of 1.15:1 within two years, with a 10% injection.

Hotels, marinas, RV parks and campgrounds

Eligibility still turns on the transient test, carried into 8.1 word for word: more than 50% of the prior year's revenue from transients who stay 30 days or less at a time; a start-up shows it in projections. Lodging and marinas are listed special purpose properties; RV parks and campgrounds are not named, and the lender decides. For an acquisition of a hotel, Appendix 15 itself gives hotels as an example of the special purpose projection exception where the real estate fully secures the loan, so a hotel purchase is the one acquisition type most likely to be underwritten on a two-year projection, with the historical ratio recorded beside it and the variance explained. That variance analysis is market work: it has to say why the buyer's occupancy and rate will differ from the seller's.

Restaurants, quick service and coffee

Restaurants are not on the special purpose list, so an acquisition has no projection door and no 25-year route: 1.25:1 on history, 10% down, ten years on the business. A purchase at $3 million or more adds the quality-of-earnings report, and the cash proof will matter more in a cash-heavy business than anywhere else. A new restaurant is a start-up on projections. The FY2027 fee waiver reaches a restaurant only through the rural county test.

Childcare, veterinary, medical, funeral, auto service and laundromats

These are the acquisition-heavy service categories. Medical facilities, funeral homes with crematoriums and service centers with pits and in-ground lifts are on the special purpose list; childcare, veterinary practices and laundromats are not. For all of them the Appendix 15 mechanics are the same: category, floor, 10% injection, 36-month seller note seasoning, 24-month consulting cap, and the $350,000 line below which the lender may value the business itself. Small practices change hands below that line often, and the restoration of 7(a) Small and SBA Express for acquisitions matters here more than anywhere: a $300,000 veterinary buyout can again be done on a small loan, but at the full 1.25:1 floor.

Self-storage and RV and boat storage

Self-storage is not on SBA's special purpose list, yet Appendix 15 names storage units, with hotels, as its example of a special purpose acquisition the real estate fully secures. The two statements are both in the text and a lender will have to reconcile them for each deal. Where it classifies the property as special purpose and the appraisal supports the price, a storage acquisition may be underwritten on projections; otherwise it is tested on trailing EBITDA like any other business. Ground-up storage remains a start-up credit on projections.

Manufacturers and the food supply chain

These are the beneficiaries of the fee schedule: no 7(a) upfront fee on loans to $700,000, no 504 fees at any size, a $150,000-per-job test on the debenture, a $5.5 million per-project 504 ceiling for small manufacturers, and the ability to bundle a facility and a production line in one 504 project. The feasibility question for these projects is usually the facility's own economics rather than an acquisition test.

What this means for the feasibility study

The regulation has not moved: 13 CFR 120.160(b) still says SBA may require a feasibility study, and nothing in 8.1 makes it mandatory. What moved is the credit question. For an acquisition the lender must now prove that last year's earnings cover next year's debt, so the market analysis in the file has to explain trailing performance: whether the trade area produced those sales or the seller did, whether the customer base and margins survive a change of hands, whether the add-backs that lift an adjusted ratio over the floor are real, and whether the quality-of-earnings adjustments reflect a business the market will keep paying for. A forecast is still prepared, because the lender must evaluate it, but it no longer decides the credit.

For a start-up, a ground-up build or an expansion, nothing in the logic changed and the study remains the evidence under the projected coverage ratio. For the special purpose acquisition that 8.1 allows on projections, the study has a new deliverable: a two-year projection reconciled to the acquired business's own history, with the variance explained line by line, because the SOP now requires that analysis in the credit memorandum. Scoping a study without knowing which Appendix 15 category the deal falls into, and whether the lender intends to use the projection exception, is scoping it blind.