SBA Eliminates SBSS Requirement for Small 7(a) Loans: What It Means for SBA Approvals in 2026

The SBA is removing SBSS as a requirement for loans under $350,000 starting February 2026, but most lenders will likely continue using it for risk assessment.
The rollout has created industry confusion, with unclear communication about implementation details and varying interpretations among lenders.
Despite regulatory changes, credit quality remains crucial for SBA loan approval, making proper pre-qualification and understanding your business credit profile even more important.

Beginning February 28, 2026, the SBA will no longer require the Small Business Scoring Service (SBSS) as part of underwriting for SBA 7(a) loans of $350,000 or less. The stated goal is to allow lenders to use their own credit models and speed up access to capital for small businesses.

While the announcement sounds straightforward, the reality is more complex—and many lenders and borrowers are already confused about what this change actually means. Part of that confusion stems from how this was communicated. Rather than a formal press release or SOP update, the SBA notified lenders through a direct email:

SBA

U.S. Small Business Administration

Office of Capital Access

Jan 2026

SBSS Requirement Discontinued for 7(a) Small Loans

We have made the decision to discontinue the required use of the SBSS within the underwriting of 7(a) Small loans (those at or below $350,000) to enable lenders to use their existing scoring models and streamline the delivery of small-dollar lending to their customers.

SBA will publish a Procedural Notice in January 2026 that will outline the parameters for the use of loan scoring models following the sunset of SBSS.

Lenders using both SBSS and their own in-house model will be able to continue using their internal model in their underwriting. This change will not impact the SBA Express program.

📅 Training Session

The Office of Capital Access will provide training on the SBSS sunset during the 7(a) Connect Call on Tuesday, January 20, 2026.

Lenders can submit questions on the sunset of the SBSS directly to the Office of Financial Assistance at 7aQuestions@sba.gov

U.S. Small Business Administration · Office of Capital Access · Washington, D.C.

What the SBA’s SBSS Change Really Means

First, a critical clarification:

SBSS is no longer required - but it is not going away.

The SBA’s decision removes an underwriting rule, not the relevance of SBSS itself. Lenders are still free to use SBSS in underwriting, and many are expected to continue doing so.

Key points to understand:

Lenders are not required to stop using SBSS
SBSS remains one of the most trusted small business credit risk scores
Many lenders already use SBSS outside of SBA loans
Removing SBSS entirely would increase risk for lenders - not reduce it

At FastWaySBA, we expect most SBA lenders will continue to pull SBSS, even after February 2026, especially for faster approvals and risk-based pricing.

Confusion Across the SBA Lending Industry

The rollout of this change has been unclear.

Communication from the SBA has varied, and even industry leaders - including contacts at FICO - were reportedly surprised by the notice. This suggests the implementation details may still be evolving, and lender interpretation may differ until more formal guidance is issued.

As a result, many lenders are taking a conservative approach: maintaining SBSS as part of their underwriting stack while preparing for a more flexible regulatory environment.

Why SBSS Still Matters for SBA Loan Approval

Even without a mandate, SBSS remains one of the fastest ways to assess SBA loan approval likelihood.

SBSS evaluates:

Business credit history
Personal credit of owners
Financial and operational data

For small SBA 7(a) loans, this blended scoring approach allows lenders to:

Pre-screen applicants more efficiently
Reduce underwriting bottlenecks
Approve qualified borrowers faster

In short, SBSS is still a major driver of SBA loan outcomes, regardless of regulatory changes.

FastWaySBA’s Advantage: Smarter Pre-Qualification

One of the biggest problems in SBA lending today is poor pre-qualification. Many brokers and lenders rely on surface-level checks that lead to unnecessary declines and delays.

FastWay SBA takes a different approach.

We have the ability to:

Evaluate SBSS when relevant
Use more advanced and insightful credit scoring methods with the help of SBASCORE.com
Identify approval likelihood before a full SBA submission

This allows us to match borrowers with the right lenders upfront, reduce friction in underwriting, and accelerate funding timelines - especially for loans under $350,000.

What Business Owners Should Do Before Applying for an SBA Loan

The removal of a formal SBSS requirement does not mean SBA lending is becoming less credit-driven. Combined with the 7 SBA rule changes we covered heading into 2026, it means underwriting is becoming more lender-specific and more complex—making preparation even more important.

Before applying, business owners should:

Understand their SBA approval profile
Identify potential red flags early
Work with a platform that pre-screens intelligently

FastWaySBA helps business owners navigate these changes by providing clearer insight, faster pre-qualification, and access to lenders actively funding SBA 7(a) loans.

The SBA’s decision to sunset the SBSS requirement marks a shift toward flexibility - but not simplicity.

Credit quality still matters. Lender discretion still matters. And borrowers who understand their profile before applying will continue to win.

As February 2026 approaches, FastWaySBA will continue monitoring SBA guidance and lender behavior to help business owners secure capital faster and with fewer surprises.

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