The SBA No Longer Has to Ask for Public Comment on Loan and Contracting Rules. Here's What Changes

“Yes. Despite these exemptions, SBA will follow the public participation requirements of the Administrative Procedure Act.” That was the SBA’s answer, written into its regulations in 1996, to the question of whether it had waived its right to skip public comment ^[1]. As of Aug. 31, the answer is no. If you borrow through an SBA program, sell to the government as a small business, or have ever filed a comment on an SBA proposal, this changes how the next rule may reach you.

What the SBA changed on Aug. 31

Some background first. The Administrative Procedure Act, the law that sets the ground rules for federal regulations, normally makes an agency publish a proposed rule and let the public submit “written data, views, or arguments” before it finalizes anything ^[1]. But the law carves out matters “relating to agency management or personnel or to public property, loans, grants, benefits, or contracts” ^[1]. For an agency like the SBA, that carve-out covers a lot of what it does.

The SBA chose not to use it. A 1971 notice from the Administrator set the policy, a 1974 regulation put it in the rulebook, and the 1996 rewrite at 13 CFR 101.108 kept it ^[1]. For about five decades, the SBA took comment on rules for its loan, grant, benefit and contract programs even though nobody made it ^[4].

The final rule, signed by Administrator Kelly Loeffler, removes section 101.108 ^[1]. From now on, the SBA follows the APA’s default: it must take comment where the law requires it, and it “may still request public comments” where it decides public participation is “advantageous” ^[1].

The rule itself went through no comment period. The SBA called it a general statement of policy, or alternatively a rule of agency procedure, and said it could take effect immediately because it “relieves a restriction” ^[1].

Why the SBA says it needs this

The SBA’s stated reason is speed. It says it “has a new policy of acting more nimbly in response to changing circumstances,” and that the old policy “slows down regulatory and deregulatory actions” ^[1]. It lists faster policy changes in programs “where Congress has given the SBA broad discretion,” and saved staff time, as benefits ^[1].

It also put a dollar figure on it. The SBA counted 33 proposed rules from 2021 through 2025, estimated 40 hours of a GS-13 employee’s time to answer comments on each, and came up with $28,029 a year in savings ^[1]. It added $4,311 a year for the public’s time not spent writing comments, for a total of $32,340 ^[1].

The SBA admits a possible downside: comments sometimes “improve the SBA’s regulations,” but it expects that loss to be “minor” because it can still ask for comment when the benefits look worth it ^[1].

The SBA isn’t alone. HHS dropped its version of this policy, known as the Richardson Waiver, in March 2025, calling it “contrary to the clear text of the APA” ^[3]. The Labor Department removed a nearly identical 1971 policy in a rule that took effect July 31, 2025, citing “ossification” and “self-imposed bureaucracy” ^{[2, 4]}. According to Holland & Knight, USDA went first, in 2013, though it took 30 days of comment on its own repeal ^[4].

The concern from the other side

Holland & Knight’s government contracts group, writing the day the rule published, said it “may reduce opportunities for affected businesses and other stakeholders to participate” in shaping SBA programs ^[4].

The firm also raised a question the SBA’s rule doesn’t answer. Programs like 8(a), HUBZone, the women-owned and service-disabled veteran-owned programs, mentor-protégé and size standards set who is eligible and how they participate; the firm says “these programs do not directly provide for contracts or benefits,” so it’s unclear whether the exemption covers them at all ^[4]. It added that skipping comment, “particularly in regulatory areas with significant impacts,” could become grounds to challenge a rule ^[4].

There’s a quieter piece here, too. The Regulatory Flexibility Act makes agencies analyze how their rules hit small entities, but the SBA’s rule notes that the analysis is required only when notice and comment is required ^[1]. A loan or contract rule issued without a proposal would skip that small-business impact analysis.

Whether the courts care about the old promises is a separate question. Holland & Knight points to a May 2026 federal district court decision dismissing a challenge to HHS’s repeal for lack of standing; the court said that choosing “to do more than a statute demands does not increase what that statute actually demands” ^[4].

Does this apply to you?

Mostly, it applies the next time the SBA changes the rules for something you rely on. Three hypotheticals:

A hypothetical bakery applying for a 7(a) loan through its local bank. Loan rules sit squarely in the APA’s list of exempt matters ^[1]. A future change to loan terms could be published as a final rule without a proposal first, so the owner might learn about it from the lender, not from a comment docket.

A hypothetical HUBZone-certified electrical contractor. This is the gray zone Holland & Knight flagged ^[4]. The SBA may still propose changes to the program for comment, as it did for its recent 8(a) eligibility rule, according to the firm ^[4]. Or it may not. Nothing in the Aug. 31 rule says which.

A hypothetical landscaping company that wanted to comment on size standards. Good news: that window is still open. The SBA’s Aug. 20 size standards proposal asks for comments by Sept. 21 ^[5], and the new rule doesn’t withdraw it ^[1]. I covered that proposal in last week’s column on headcount-based size standards.

What to do now

You can’t comment on a proposal that never appears, so the work shifts to watching. Holland & Knight points to two places ^[4]: the SBA’s entries in the semiannual Unified Agenda, where agencies list rules they plan to issue, and the public docket of “significant” rules under review at OIRA, the Office of Information and Regulatory Affairs, where the public can request meetings with its officials.

My view on process: a bakery doesn’t have a regulatory affairs department. The comment docket was one of the few places where a small owner’s letter sat in the same file as a bank’s. That place still exists for any rule the SBA chooses to propose. It just isn’t guaranteed.

What I’m keeping an eye on

Sept. 21. The size standards comment deadline, the clearest live chance to be heard on a major SBA rule ^[5].

The SBA’s next loan or contracting rule. Whether it arrives as a proposal or as a final rule will show how the agency plans to use its new discretion ^{[1, 4]}.

— Sally