90% Guarantee. 10% Risk. May 1st.

What Changed

The SBA is increasing the guarantee percentage from 75% to 90% for businesses in two sectors: manufacturing and food supply chain.

In plain English: when an SBA lender makes a $1M loan, they normally keep $250K of the risk on their own books. Under the new rule, they keep only $100K. The SBA backs the rest.

That might sound like a technicality. It’s not. Lenders price risk. When they retain less of it, they approve more deals, move faster, and stretch further on credits that would have been a no six months ago.

Who Qualifies

The guarantee increase applies to businesses with NAICS codes in two categories:

Manufacturing (Sectors 31, 32, 33)

This covers everything from food processing and beverage manufacturing to metal fabrication, plastics, machinery, electronics, and furniture. If you make a physical product in the US, your NAICS code probably starts with 31, 32, or 33.

Food Supply Chain

This is the detailed list:

→ Oilseed and grain farming (1111)
→ Vegetable and melon farming (1112)
→ Fruit and tree nut farming (1113)
→ Cattle ranching and farming (1121)
→ Hog and pig farming (1122)
→ Poultry and egg production (1123)
→ Sheep and goat farming (1124)
→ Aquaculture (1125)
→ Other animal production (1129)
→ Fishing (1141)
→ Crop support activities (1151)
→ Animal production support (1152)
→ Farm and garden equipment wholesalers (423820)
→ Grocery and related product wholesalers (4244)
→ Farm product raw material wholesalers (4245)
→ Farm supplies wholesalers (424910)
→ Supermarkets and grocery retailers (445110)
→ Refrigerated and frozen food trucking, local (484220)
→ Refrigerated and frozen food trucking, long distance (484230)
→ Refrigerated warehousing and storage (493120)
→ Farm warehousing and storage (493130)

Important note: the trucking codes (484220 and 484230) are limited to refrigerated/frozen trucking, farm products, grain products, and livestock. General freight does not qualify.

Why This Matters to Your Lender

When a credit committee evaluates an SBA loan, the guarantee percentage is one of the first things they look at. Higher guarantee means less capital at risk if the loan defaults.

At 90% guarantee, here’s what changes in practice:

→ Marginal deals get a second look. The business with 1.2x DSCR that was a pass at 75% guarantee might be an approval at 90%.

→ Approvals move faster. Less retained risk means fewer internal hurdles. The loan officer has an easier pitch to the credit committee.

→ Larger loans become possible. Lenders have portfolio concentration limits. When each loan takes up less of their risk capacity, they can do bigger deals.

→ Collateral shortfalls matter less. The gap between your assets and the loan amount is less of a concern when the SBA is backing 90 cents on the dollar.

None of this means underwriting standards disappear. You still need a viable business, reasonable cash flow, and a credible borrower. But the bar just got meaningfully lower for these specific industries.

What You Should Do Before May 1

If your business falls under one of these NAICS codes, here’s how to take advantage:

1. Verify your NAICS code. Check your tax return or business registration. If you’re not sure, look it up at census.gov. The wrong code means you don’t qualify.

2. Get your package ready now. Tax returns, interim financials, personal financial statement, business plan if you have one. Lenders who want to move on May 1 will want to see a complete package, not a conversation.

3. Approach lenders who do volume in your sector. Not every SBA lender focuses on manufacturing or food supply chain. The ones who do will understand the guarantee change and move on it fastest.

4. Reference the guarantee change in your pitch. Don’t assume your lender knows about it. Say it directly: “This loan qualifies for the new 90% guarantee effective May 1.” Make it easy for them to say yes.

5. If you were declined in the last 12 months, go back. The same lender who said no might say yes under the new guarantee. Different risk, different answer.

The Bottom Line

Policy changes like this don’t come around often. When the government makes it meaningfully less risky for lenders to approve your loan, that’s a window. Windows close.

If you’re in manufacturing or food supply chain and you’ve been thinking about an SBA loan for acquisition, expansion, equipment, or working capital, the math just shifted in your favor. Get your package together and start talking to lenders before May 1, not after.

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