SBA Policy Shifts Redefine Portfolio Risk—and Raise the Bar for Valuations

Policy changes over the last year to the Small Business Administration’s loan programs are reshaping the small-business lending landscape. New borrower eligibility restrictions taking effect March 1, 2026, are expected to alter loan demand and portfolio composition for banks with active SBA lending programs.

For lenders, these changes introduce a new layer of complexity. Shifts in eligibility can influence origination volumes, prepayment behavior, and the balance between guaranteed and non-guaranteed exposures—placing added pressure on risk measurement, valuation accuracy, and strategic planning.

At the same time, overall SBA loan activity continues to grow as banks seek yield, diversification, and government-guaranteed credit exposure. Against this backdrop, the need for accurate, defensible SBA loan valuations has never been more critical.

Level1Analytics supports banks navigating this evolving environment with comprehensive SBA loan valuation and analytics capabilities, including:

• Valuations for guaranteed and non-guaranteed SBA loans retained in portfolio
• Gain-on-sale analyses and servicing rights valuations for sold SBA loans
• Interactive dashboards delivering instantaneous access to attribution reports, rate sensitivity, prepayment analysis, and trend data

Built-in testing and predictive algorithms help lenders understand not just what their SBA portfolios are worth—but why, and how values may respond as borrower dynamics and policy conditions continue to shift.

Looking Ahead

Policy risk is increasingly a portfolio risk factor. As SBA eligibility rules evolve and lending demand adapts, banks that pair growth strategies with robust, transparent valuation frameworks will be best positioned to manage risk, support stakeholders, and act decisively.

Level1Analytics helps banks bring clarity to SBA valuations—so decision-making stays confident, even as the market changes.

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