504 Program Risk Oversight Act
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The bill would require the Small Business Administration to conduct an annual risk analysis of all loans guaranteed under its 504 program, which finances major fixed assets like land and equipment for small businesses, and to report detailed findings to Congress each year.
By requiring granular breakdowns of risk by industry, lender concentration, loan size, borrower history, and property type, the bill would give Congress and the public a standing early-warning system for problems in a multibillion-dollar loan guarantee program.
What this bill would do
What it would do
The bill would amend the Small Business Investment Act of 1958 to add a new section requiring the SBA Administrator to annually analyze the risk of the agency's entire portfolio of loans guaranteed under the 504 program, which provides long-term, fixed-rate financing to small businesses for major fixed assets such as land, buildings, and equipment. Starting December 1, 2025, and every year after, the Administrator would have to report the results to Congress, covering overall program risk, risk by industry, risk from concentrated lenders (without naming them), risk by loan size and loan age, risk by borrower type, and risk from limited or special-purpose properties, along with mitigation steps taken.
The report would also have to include default purchase and collection data, enforcement actions, and civil penalties, and would have to be posted publicly on an SBA website within seven days of submission to Congress. The bill does not change loan eligibility, funding levels, or program structure itself — it only adds a recurring risk-reporting and transparency requirement.
Key provisions
- 1Would require the SBA Administrator to annually conduct a risk analysis of the entire portfolio of loans guaranteed under the 504 program
- 2Would require an annual report to Congress, due December 1, 2025 and annually thereafter, detailing risk by industry, lender concentration, loan size, loan age, borrower type, and special-purpose properties
- 3Would require the report to include mitigation steps, default purchase and collection data, enforcement actions, and civil penalties assessed
- 4Would require the SBA to publicly post each report on its website within 7 days of submitting it to Congress
Who would be affected
The Small Business Administration, which would have to produce the annual analysis and report; development companies that make 504 program loans, whose aggregated lending risk would be analyzed; small business borrowers using 504 loans; and members of Congress and the public who would gain access to the new annual reports.
Why it matters
The requirement would give Congress and the public recurring, detailed visibility into how risky the 504 loan portfolio is and how concentrated that risk is among certain lenders, loan sizes, or industries, potentially prompting earlier oversight action or policy changes before losses grow, though the bill itself does not alter lending rules or program funding.
What would change
Changes to existing law
Creates Small Business Investment Act of 1958 (Title V, 15 U.S.C. 695 et seq.) (Sec. 2)
Adds a new Section 511 requiring annual portfolio risk analysis and public reporting for loans guaranteed under the 504 program
Agencies directed to act
Effective dates
- First annual portfolio risk analysis report to Congress is due
- Publication of the report on an SBA public website after submission to Congress
Funding and costs
Congressional Budget Office estimate
CBO estimates H.R. 5788 would cost less than $500,000 per year, totaling $1 million over the 2026–2030 period, with no effect on direct spending, revenues, or the deficit.
CBO estimates that implementing the 504 Program Risk Oversight Act would have no effect on direct (mandatory) spending or revenues, leaving the deficit unchanged. The only budgetary impact would come from discretionary spending (funds subject to annual appropriations): modifying the Small Business Administration's loan management system would cost approximately $250,000, and the ongoing annual risk analysis and report would require the equivalent of half a full-time employee at roughly $95,000 per year — bringing total costs to less than $500,000 in each year and about $1 million over the 2026–2030 period. CBO did not estimate costs beyond 2030. The bill contains no intergovernmental or private-sector mandates.
How implementation would work
The SBA Administrator would conduct the risk analysis internally each fiscal year, then compile a report breaking down risk by industry, lender concentration, loan size tiers, loan age, borrower business history, and special-purpose properties, plus mitigation steps and enforcement data. The report goes to Congress annually starting December 1, 2025, and must be posted on an SBA website within seven days of that submission, creating a recurring, publicly visible oversight cycle without new rulemaking or enforcement authority.
Legislative status & sources
Latest action
Received in the Senate and Read twice and referred to the Committee on Small Business and Entrepreneurship.
Official CRS summary
Show the CRS summaryHide the CRS summary
This bill requires the Small Business Administration (SBA) to annually conduct a risk analysis of all loans guaranteed under the 504 loan program.
The 504 loan program provides long-term, fixed-rate financing to qualifying small businesses for major fixed assets, such as land, buildings, equipment, and machinery.
The SBA must annually report the results of the risk analysis for each preceding fiscal year, including the steps taken by the SBA to mitigate the risks identified in the analysis.
Legislative subjects
Bank accounts, deposits, capital; Civil actions and liability; Commerce; Congressional oversight; Government information and archives; Government studies and investigations; Performance measurement
Committee report
H. Rept. 119-404