SBA loan for a NEMT business: 7(a), Express, and microloans under the 2025 and 2026 rule changes

With an SBA loan, a bank or community lender makes the loan and SBA guarantees part of it. You apply to the lender, the lender follows SBA’s rulebook, and SBA covers part of the loss if you default. Nearly every NEMT company is small enough, since SBA’s ceiling for special needs transportation companies (NAICS 485991) sits at $19.0 million of yearly receipts, averaged.

The rulebook changed three times between June 2025 and October 2026. SOP 50 10 8 took effect June 1, 2025. On March 1, 2026, SBA dropped its credit score screen for 7(a) Small loans and shut out companies with even one owner lacking U.S. citizenship or nationality. Applications that get their SBA loan number from October 1, 2026 on fall under SOP 50 10 8.1. This guide covers the rules as they stand now, with the NEMT details lenders ask about. For how SBA loans compare with leases, community lenders, and grants, start with NEMT business funding.

Match the program to what you are buying

Pick the program by the thing the money pays for. A van is a long asset, payroll during the payment lag is a short one, and SBA handles them differently.

Two rules shape the term. Working capital loans top out at 10 years and equipment loans generally do too, and SBA wants the shortest term that suits what the money buys. An SBA Express line can last up to 10 years including its repayment period. On lines longer than 12 months, the repayment period must be at least as long as the draw period, and no draws are allowed after the first 60 months. A line of credit for a NEMT company covers how lenders size and police revolving lines.

The rule changes, date by date

The four dates below change what a lender asks of you:

1. June 1, 2025. SOP 50 10 8 took effect and reintroduced the 7(a) and 504 lending criteria that the current version builds on.
2. March 1, 2026. SBA stopped issuing and screening FICO SBSS scores on 7(a) Small loans (Procedural Notices 5000-875701 and 5000-876777). In its place, lenders run the credit analysis they use on same-size loans without a guarantee, plus a minimum debt service coverage of 1.10.
3. March 1, 2026. Policy Notice 5000-876441 requires 100 percent of direct and indirect owners to be U.S. citizens or U.S. nationals living in the United States, and ended the old 5 percent foreign ownership allowance.
4. October 1, 2026. Both notices were folded into SOP 50 10 8.1, and new fiscal year 2027 fees began.

The 10 percent you bring to a startup loan

To SBA, a startup is a business that has been earning revenue from its real line of work for a year or less. Any 7(a) loan to one requires the owners to contribute no less than a tenth of the total project cost. That total takes in everything it costs to open the doors, no matter who pays for each piece, with two exceptions: lines of credit and 504 loans. Two loans approved more than 90 days apart are treated as two projects.

What counts as your 10 percent:

• Unborrowed cash. Savings, money already sitting in the company, or a gift from family.
• Money you borrowed personally, as long as something other than the business pays it back. A paycheck from your own company does not count as that outside source.
• Standby debt. A note that pays nothing, principal or interest, while the SBA loan is outstanding, documented on SBA Form 155 or the lender’s version.
• Grant money that can never be clawed back while the SBA loan is open.
• Prepaid costs you can prove. Paid invoices, canceled checks, or bank statements for eligible expenses. Loan agent fees, classes, and advisors are excluded.

For example, a hypothetical startup budgets $160,000: two converted vans, insurance deposits, licensing and broker credentialing costs, an office deposit, and three months of operating cash. Its injection must be at least $16,000. Under SBA’s wording, if it funds the operating cash through a separate SBA Express line instead, that line sits outside the project cost, and the required injection drops with it. SBA Express lenders set their own equity rule, so ask.

How lenders judge credit without the SBSS score

For a 7(a) Small loan, the lender now pulls personal credit on each owner and guarantor and has to write up any issues it sees in its credit memo. It may use a scoring model its federal regulator allows, but the model cannot rely only on consumer credit scores. If it uses a score, the memo states the result and the approval range.

The repayment test is a number. Debt service coverage takes operating cash flow, measured as EBITDA, and divides it by the year’s principal and interest on every business debt, the new loan included.

• 7(a) Small. At least 1.10 on historical results, or 12-month projections showing 1.10 within a year of funding.
• Standard 7(a), startup. Projections that reach 1.15 by the end of the second year after funding, plus global coverage of 1.0 or better once affiliated businesses are counted.
• Bank statements. The lender reads two months of activity on your main operating account to catch debts left off your schedule. A company not yet operating, with no debts, is excused.

Here is how that works for the hypothetical startup above, borrowing $144,000 at the 13.0 percent cap for seven years. The payment is about $2,620 a month, or $31,436 a year. At 1.10 coverage, the projections must show at least $34,580 of operating cash flow in the first year after funding. The break-even calculator turns that into trips per week.

Projections that show the payment lag

Build the forecast on deposits in the month they arrive, not on rides in the month they run, because deposits are what make the loan payments. Take the MTM agreement on Pennsylvania’s website (January 1, 2023 version). MTM pays a clean invoice it does not dispute inside 30 days of your online submission. Any claim reaching MTM after the 90-day mark goes unpaid, and so does any trip run with a driver or van it never credentialed. It also guarantees no trip volume.

Two rules make the lag a lender question. On 7(a) Small loans over $50,000 where half or more of the proceeds go to working capital, the lender has to justify that much working capital in writing. And when half or more is working capital, the lender must take a lien on all of the company’s fixed assets, up to fully secured. Show the gap in your own numbers: how many weeks of wages, fuel, and insurance premiums you carry until the first broker deposit, and where each payer’s rates come from. How long Medicaid takes to pay breaks the clocks down by payer.

Who can own the company, and who signs

From March 1, 2026, every direct or indirect owner of a 7(a) or 504 borrower must hold U.S. citizenship or U.S. national status and live mainly in this country, and so must anyone SBA requires as a guarantor. A company that owns part of yours must be formed in the United States. Green card holders are out, and so are people here on visas, DACA, refugee status, or asylum. Such an owner has to sell every share before the lender receives the loan number. SBA looks back six months, so a recent owner who kept even a small stake still blocks the loan. Microloans have applied the same 100 percent rule since April 1, 2026, under Policy Notice 5000-877232. Naturalized citizens qualify like any other citizen. If this affects your ownership plan, read starting a NEMT business as an immigrant.

The rest of the signature rules:

• Personal guarantees. Each owner at 20 percent or above, counting stakes held through other entities, signs an unlimited guarantee. When no owner reaches 20 percent, one of them still has to guarantee the whole loan.
• Spouses. When spouses and minor children together own 20 percent or more, each owning spouse guarantees in full. A minor child may not own 20 percent or more.
• Personal financial statements. Every guarantor signs one dated within 90 days, usually SBA Form 413.
• Ineligible businesses. Under 13 CFR 120.110, nonprofits cannot borrow, though a for-profit subsidiary can. Neither can a business with an associate who is incarcerated or under indictment for a felony or a crime of financial misconduct or false statement, or, unless SBA waives it, one tied to a past default that cost the government money.

Collateral, rates, and fees as of October 2026

SBA will not let a lender decline a loan only because collateral is short, but it sets minimums:

• 7(a) Small or SBA Express of $50,000 or less. No collateral required.
• 7(a) Small over $50,000. A first lien on whatever the loan pays for, the vans for example. A van valued at $20,000 or under, or one another lender already holds a lien on, can be left out.
• Standard 7(a). Secured by the company’s fixed assets up to the loan amount. Where those fall short, the lender turns to real estate you own personally, if your equity in it is 25 percent or more.

Variable rates are capped over the prime rate in effect on the first business day of the month. In the Federal Reserve’s data, prime held at 7.00 percent through September 30, 2026. On 7(a) Small and Express loans the cap is prime plus 6.5 points up to $50,000, plus 6.0 to $250,000, plus 4.5 to $350,000, and plus 3.0 for Express loans above that.

SBA’s fee schedule for fiscal year 2027 covers approvals between October 1, 2026 and September 30, 2027. On a loan with a term longer than a year, the upfront guaranty fee is 2 percent of SBA’s guaranteed share if the loan is $150,000 or smaller, and 3 percent if it falls between $150,001 and $700,000. A rural business (one in a county the Census Bureau rates 30 percent rural or more) pays nothing on a 7(a) loan up to $700,000. SBA Express loans to companies a veteran or a veteran’s spouse owns and controls also carry a $0 fee. On the $144,000 example, the fee is $2,448 in a city and nothing in a rural county.

Debts that can block an SBA loan

Some financing taken before the loan stays a problem after it. SOP 50 10 8.1 bars using a 7(a) loan to pay off a factoring agreement. A merchant cash advance qualifies for refinancing once it has become a term loan that has amortized for 24 months or more, with no new advances since. An active advance is not eligible, and its daily debits show up in the two months of bank statements the lender reviews.

Showing a lender what each payer is worth

A NEMT loan file is stronger when trip volume and revenue are broken out by payer, not shown as one total. HealthRide’s payer summary report lists each payer’s completed trips and cancellations, the revenue you billed, and the balance still unpaid, for whatever dates you choose. If the lender wants the detail, the trip log behind it downloads as a spreadsheet or PDF. See reports.