Weekly roundup

Hey Micro Monies community—here’s what’s new and important this week:

We’re tracking key updates that could impact how you lend, invest, or structure your business. From major changes in SBA loan rules to new California laws that affect subscription models, family leave, and lien enforcement, there’s a lot shifting behind the scenes.

Whether you're actively lending, planning your next step, or staying ready, this week’s roundup gives you what you need to stay informed and make smart moves.

New Regulations & Policy Updates

New Rules for Subscription-Based Businesses in California

If you run a subscription-based business, or plan to - there’s a new California law you need to know about.

AB 2863 took effect on July 1, 2025, and it introduces stricter rules for how subscription services operate. The law now requires:

• Clear consent from customers before enrollment

• Simpler cancellation options, especially for online signups

• Transparency around “free-to-pay conversions” (when a free trial turns into a paid plan)

But the changes go beyond just the subscription terms.

What’s new is that liability now extends to the actual product or service, not just the subscription process itself. That means if your service or marketing is misleading in any way, you (and even your third-party marketers) could face legal consequences.

If your business uses recurring billing, it’s a good time to:

• Review your signup and cancellation flows

• Double-check your trial offer terms

• Make sure your product and marketing are aligned with what’s being sold

Failing to update these processes could result in fines or lawsuits, so this isn’t something to put off. Stay ahead of it now and protect your business.

Institutional-Grade Opportunities for HNW Investors

Long Angle is a private, vetted community connecting high-net-worth entrepreneurs and executives with institutional-grade alternative investments. No membership fees.

Access top-tier opportunities across private equity, credit, search funds, litigation finance, energy, hedge funds, and secondaries. Leverage collective expertise and scale for better terms.

Invest alongside pensions, endowments, and family offices. With $100M+ invested annually, secure preferential terms unavailable to individual investors.

Apply to Join

Paid Family Leave Updates That May Impact Small Businesses

As part of California’s rollout of SB 951, big changes are happening to the state’s Paid Family Leave (PFL) program.

Starting this year, workers with lower incomes may now receive up to 90% of their wages while on leave, up from previous replacement levels. The changes are meant to increase access to PFL and remove barriers that kept many people from using it.

While this is a state-run program, small business owners should still take note. With more employees eligible and more likely to participate, you’ll want to:

• Review your leave policies

• Understand the wage replacement structure

• Stay up to date on state guidance for required notices and leave tracking

Expect additional updates from the state throughout 2025 as the implementation continues.

More Local Contracting Opportunities Could Be Coming

California’s SB 781 is opening the door for more small businesses to compete for local government contracts.

This new law allows cities and counties to create Small Business Utilization Programs (SBUPs) aimed at increasing the number of local contracts awarded to small firms.

For entrepreneurs ready to work with the public sector, this could mean:

• Easier access to local procurement opportunities

• New revenue streams through government contracts

• A chance to grow visibility and credibility in your region

Heads-up: Implementation will look different in each city or county, so it’s a good idea to keep an eye on local procurement bulletins, updates from your chamber of commerce, and any small business outreach events in your area.

SBA SOP 50 10 8 Updates: Key Policy Changes for Business Lenders

Major SBA Loan Program Updates You Should Know About

As of June 1, 2025, the SBA rolled out some big updates to its loan programs through a revised version of its Standard Operating Procedures (SOP 50 10 8). These changes affect both 504 and 7a loans and touch on refinancing, ownership eligibility, documentation, and what lenders are responsible for. Some of the updates simplify things, while others introduce stricter rules that lenders need to pay close attention to.

Here’s a breakdown of what’s changed and what it means:

504 Loan Program Highlights

1. Energy Project Cap Reinstated
The SBA brought back the $16.5 million cap for 504 Energy Public Policy Projects. Applicants and affiliates can now access up to $16.5M total, with a max of $5.5M per project. Standard 504 loans are still capped at $5M.

2. Expanded Refinancing Options

• Loans can now be refinanced up to 90% loan-to-value (LTV) even with cash out, previously it was limited to 85% with cash out.

• No more 20% cap on cash out. Funds can now be used for eligible business expenses.

• “Other secured debt” tied to the same fixed asset can now be paid off using cash out proceeds.

• CDCs no longer need written permission from 7a lenders when refinancing federal debt, just a 10-day notice is required.

• The “Substantial Benefit” savings requirement (10%) is gone. You just need to show a reduction in payment on the refinanced debt.

Changes That Apply to Both 7a and 504

1. U.S.-Based Business Requirement
The business must be formed and based in the U.S. or its territories.

2. Franchise Directory Is Back

• Brands must be in the SBA Franchise Directory for loans approved on or after June 1, 2025.

• Franchisors/Distributors must submit certifications by July 31, 2025.

• Addendums are no longer needed if the brand is already listed.

• Lenders are now responsible for reviewing Management Agreements unless it’s part of a franchise package.

3. Updated Environmental Review Process
Lenders now submit environmental documents via E-Tran only. Submissions through SBA loan centers are no longer accepted—and skipping this step could affect loan guarantees.

4. New Citizenship & Ownership Requirements
All direct and indirect owners and guarantors must:

• Be U.S. citizens, naturalized citizens, nationals, or unconditional lawful permanent residents (LPRs).

• Live primarily in the U.S. or territories.

• Pass alien verification (if not a U.S. citizen).
  Lenders must enter full ownership info into E-Tran, including DOBs, and confirm eligibility through the Sacramento Alien Verification System. Gone is the 51% ownership test—it’s now 100%.

5. Personal Resources and Credit Elsewhere Rules Tightened
While not a return to the old “Personal Resources Test,” lenders must make sure the applicant and 20%+ owners aren’t sitting on cash that could cover the loan. Exceptions include funds saved for medical needs, retirement, education, or major upcoming business expenses.

6. New Definition of “New Business”
A new business is now officially defined as one generating revenue for two years or less at the time of loan approval.

7. Clarified Ineligible Business Models
Businesses like coworking spaces, salon suites, and ghost kitchens are ineligible unless:

• Revenue comes from membership dues (not rent)

• No assigned space to customers

• The business provides necessary equipment

SBA also clarified that marijuana-related businesses are still fully ineligible, while hemp and CBD businesses must meet legal THC thresholds and other compliance standards.

8. Form 159
Now requires signatures from the applicant, agent, and lender. If the lender is also the agent, they must sign twice.

9. Hazard Insurance
Now required for all 7a and 504 loans over $50,000 on assets used as collateral.

10. C-PACE Financing Prohibited
You can’t use SBA loans on properties with C-PACE financing.

7a Loan Program Updates

1. Delegated Authority Use Required
Lenders with delegated authority must use it. Only non-delegated processes can be used when refinancing the same institution’s debt.

2. Reinstated SBA Fees for FY25
For loans with terms over 12 months:

• Up to $150K: 2% of guaranteed portion (keep up to 25% of fee)

• $150,001–$700K: 3%

• $700,001–$5M: 3.5% on first $1M + 3.75% on amount above $1M

3. Ineligible Refinances Still Include

• Merchant cash advances

• Factoring agreements

• Search fund acquisitions

4. New: 7a Small Loans
Defined as loans $350K or less (excludes Express, CAPLines, and pilots). SBA Express still capped at $500K.

What This Means for Lenders

This is one of the most extensive SOP overhauls we’ve seen in years. If you’re a lender or plan to work with one, this is the time to:

• Review internal processes

• Update systems

• Retrain your team

• Get familiar with the new eligibility and compliance expectations

The SBA’s goal is to increase clarity and access while holding everyone to a higher standard. For lenders and borrowers alike, staying informed and ready will make a big difference moving forward.

New Law Limits Foreclosure on Subordinate Liens in California

Effective immediately as of July 1, 2025, California’s AB 130 is changing how subordinate liens, like second mortgages, HELOCs, or junior loans, can be originated, serviced, and enforced.

The key point: Subordinate liens may no longer be enforceable if certain things happened at any time during the life of the loan. This applies to all residential properties, including 1–4 unit homes, apartment buildings, and mixed-use properties, whether the loan was for personal or business purposes.

A lender or servicer cannot foreclose on a subordinate lien if any of the following occurred:

• No contact was made with the borrower for three years

• Monthly mortgage statements were not sent

• The borrower wasn’t notified of a change in loan ownership or servicing

• The borrower received a form indicating the loan was written off (such as a 1099-C)

Before starting foreclosure, the current loan servicer must certify under penalty of perjury that none of these events ever happened at any point, even under a previous servicer. That’s a serious risk, and most won’t be willing to take it.

Although the law was designed to target “zombie” mortgages that lenders had walked away from, it’s broad enough to impact all subordinate loans, even those that were current and properly serviced.

This could have a chilling effect on private lenders and institutions offering second-position loans. If you can't enforce your lien, it's harder to justify making the loan in the first place.

Keep this on your radar if you’re lending in California or managing any notes secured by real estate.

Check out other upcoming and past events here!

That’s it for this week.

Keep showing up, keep supporting one another — and remember, small steps lead to big wins.

—The Micro Monies Team