AmiSight 1/21: SBA Eliminates SBSS for Loans Under $350K — Opportunity and Risk
- Ami Kassar
- Jan 21
- 1 min read
Effective February 28, 2026, the SBA will eliminate the SBSS score requirement for SBA loans under $350,000. While the SBA hasn’t fully explained its reasoning, the change deserves a balanced look.
I’ve never been a strong supporter of the SBSS score. A meaningful part of the model relies on business credit data that is often inaccurate, incomplete, or unavailable for smaller companies. Borrowers were frequently judged using data they couldn’t see, verify, or fix. That lack of transparency—especially compared to personal credit scoring—created frustration and unnecessary declines.
At the same time, SBSS did serve a purpose. It provided a consistent baseline and helped prevent lenders from pushing marginal deals through the system. Removing it raises a legitimate concern: without a standardized credit gate, some lenders may stretch underwriting to win volume, potentially increasing defaults and losses.
If that happens, the consequences won’t be isolated. Banks, the SBA, and borrowers themselves could all feel the impact of weaker credit discipline.
The success of this change will depend on how lenders respond. If it leads to more thoughtful, judgment-based underwriting—grounded in cash flow, management quality, and business fundamentals—it could improve outcomes for small borrowers. If it becomes an excuse to loosen standards, the results will be far less positive.
Used well, this change creates flexibility. Used poorly, it creates risk. The difference will come down to lender discipline.
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