H.R. 5788 — 504 Program Risk Oversight Act

This section requires the SBA Administrator to annually conduct a risk analysis of the portfolio of loans guaranteed under the 504 program (i.e., the Certified Development Company program, which provides long-term, fixed-rate financing to small businesses for major fixed assets to promote business growth and job creation) and submit a report to Congress by December 1, 2025, and annually thereafter, covering the prior fiscal year. The report must include (1) overall program risk and risk by industry concentration; (2) a consolidated analysis of risk from development companies responsible for at least 1% of gross loan approvals, by dollar value and number of loans, and by loan size (≤$500,000; >$500,000 to ≤$1,000,000; >$1,000,000 to ≤$2,000,000; >$2,000,000 to ≤$5,500,000); (3) risk by loan age (<1 year; 1-2 years; >2 years); (4) risk by borrower business age (new business; ≤2 years in operation; >2 years); (5) risk for loans for limited or special purpose properties (as defined in SBA guidance SOP 50 10 8, effective June 1, 2025); (6) mitigation steps; (7) totals for development companies, loans, and gross loan amounts; (8) SBA purchases of defaulted loans, collections, and charge-offs; (9) recommended enforcement actions; and (10) civil monetary penalties assessed. The Administrator must publish the report on the SBA website within seven days of congressional submission.