diff --git a/.changeset/warm-snails-hope.md b/.changeset/warm-snails-hope.md
new file mode 100644
index 000000000..c1d65a32c
--- /dev/null
+++ b/.changeset/warm-snails-hope.md
@@ -0,0 +1,5 @@
+---
+'sv': patch
+---
+
+fix(addon): relax dependency fields restriction on community add-ons
diff --git a/documentation/docs/30-add-ons/99-community.md b/documentation/docs/30-add-ons/99-community.md
index 9af218bd5..35bef18b6 100644
--- a/documentation/docs/30-add-ons/99-community.md
+++ b/documentation/docs/30-add-ons/99-community.md
@@ -150,7 +150,7 @@ Community add-ons are bundled with [tsdown](https://tsdown.dev/) into a single f
 
 ### `package.json`
 
-Your add-on must have `sv` as a peer dependency and **no** `dependencies` in `package.json`:
+Your add-on must have `sv` as a peer dependency. Any `dependencies` declared will **not** be available at runtime, everything must be bundled:
 
 ```jsonc
 {
@@ -164,7 +164,7 @@ Your add-on must have `sv` as a peer dependency and **no** `dependencies` in `pa
 	"publishConfig": {
 		"access": "public"
 	},
-	// cannot have dependencies
+	// packages declared here will not be available during runtime, it must be bundled
 	"dependencies": {},
 	"peerDependencies": {
 		// minimum version required to run by this add-on
diff --git a/packages/sv/src/cli/tests/snapshots/@my-org/sv/CONTRIBUTING.md b/packages/sv/src/cli/tests/snapshots/@my-org/sv/CONTRIBUTING.md
index d5da26c73..dd520ac7c 100644
--- a/packages/sv/src/cli/tests/snapshots/@my-org/sv/CONTRIBUTING.md
+++ b/packages/sv/src/cli/tests/snapshots/@my-org/sv/CONTRIBUTING.md
@@ -45,4 +45,4 @@ npm publish
 
 ## Things to be aware of
 
-Community add-ons must have `sv` as a `peerDependency` and should **not** have any `dependencies`. Everything else (including `@sveltejs/sv-utils`) is bundled at build time by tsdown.
+Community add-ons must have `sv` as a `peerDependency`. Any `dependencies` declared in `package.json` will not be available at runtime. Everything else (including `@sveltejs/sv-utils`) is bundled at build time by tsdown.
diff --git a/packages/sv/src/core/common.ts b/packages/sv/src/core/common.ts
index e9403ea19..a2eea09b8 100644
--- a/packages/sv/src/core/common.ts
+++ b/packages/sv/src/core/common.ts
@@ -275,7 +275,14 @@ export function updateReadme(projectPath: string, command: string) {
 }
 
 export function errorAndExit(message: string) {
-	p.log.error(message);
+	const [firstLine, ...restLines] = message.split('\n');
+
+	p.log.error(firstLine);
+	// Fixes issue where the first line of the error message is not the same color as the rest of the lines
+	for (const line of restLines) {
+		p.log.message(color.optional(line), { spacing: 0 });
+	}
+
 	p.log.message();
 	p.cancel('Operation failed.');
 	process.exit(1);
diff --git a/packages/sv/src/core/fetch-packages.ts b/packages/sv/src/core/fetch-packages.ts
index e00db1d52..1681e1112 100644
--- a/packages/sv/src/core/fetch-packages.ts
+++ b/packages/sv/src/core/fetch-packages.ts
@@ -15,7 +15,6 @@ const NODE_MODULES = fileURLToPath(new URL('../../node_modules', import.meta.url
 
 function verifyPackage(addonPkg: Record<string, any>, specifier: string): string | undefined {
 	const peerDeps = { ...addonPkg.peerDependencies };
-	const deps = { ...addonPkg.dependencies };
 
 	// valid addons should always have `sv` as a peerDependency
 	const addonSvVersion = peerDeps['sv'];
@@ -25,13 +24,6 @@ function verifyPackage(addonPkg: Record<string, any>, specifier: string): string
 		);
 	}
 
-	// addons should not have any dependencies (everything should be bundled)
-	if (Object.keys(deps).length > 0) {
-		throw new Error(
-			`Invalid add-on package detected: '${specifier}'\nCommunity add-ons should not have any 'dependencies'. Use 'peerDependencies' for 'sv' and bundle everything else`
-		);
-	}
-
 	// Check version compatibility and warn if there's a major version mismatch
 	const addon = coerceVersion(addonSvVersion);
 	const sv_major = coerceVersion(pkg.version).major;
@@ -102,7 +94,8 @@ export async function downloadPackage(options: DownloadOptions): Promise<AddonDe
 		// Try to create a symlink, but fall back to copying on Windows if it fails with EPERM
 		try {
 			fs.symlinkSync(options.path, dest, 'dir');
-		} catch (error: any) {
+		} catch (error) {
+			if (!isNodeError(error)) throw error;
 			// On Windows, symlinks may fail with EPERM if admin privileges aren't available
 			// In that case, fall back to copying the directory
 			if (platform() === 'win32' && (error.code === 'EPERM' || error.code === 'EACCES')) {
@@ -112,7 +105,7 @@ export async function downloadPackage(options: DownloadOptions): Promise<AddonDe
 			}
 		}
 
-		return await importAddonCode(pkg.name, pkg.version);
+		return await importAddonCode(pkg.name, pkg.version, pkg.exports);
 	}
 
 	const tarballUrl: string = pkg.dist.tarball;
@@ -130,35 +123,63 @@ export async function downloadPackage(options: DownloadOptions): Promise<AddonDe
 		unpackTar(path.join(NODE_MODULES, pkg.name), { strip: 1 })
 	);
 
-	return await importAddonCode(pkg.name, pkg.version);
+	return await importAddonCode(pkg.name, pkg.version, pkg.exports);
 }
 
-async function importAddonCode(pkgName: string, pkgVersion: string): Promise<AddonDefinition> {
+async function importAddonCode(
+	pkgName: string,
+	pkgVersion: string,
+	exports?: Record<string, string | undefined>
+): Promise<AddonDefinition> {
 	const issues: string[] = [];
 
-	let details: AddonDefinition | undefined;
-	try {
-		({ default: details } = await import(`${pkgName}/sv`));
-	} catch {
-		issues.push(`'/sv' export not found`);
+	const error = () => {
+		return new Error(
+			`Failed to load add-on '${pkgName}@${pkgVersion}':\n- ${issues.join('\n- ')}\n\n` +
+				`Please report this to the add-on author.`
+		);
+	};
+
+	if (!exports) {
+		issues.push(`'exports' field not found in package.json`);
+		throw error();
 	}
 
-	if (!details) {
+	const svImport = exports['./sv'] ? `${pkgName}/sv` : undefined;
+	const defaultImport = exports['.'] ? pkgName : undefined;
+	if (!svImport && !defaultImport) {
+		issues.push(`export conditions './sv' or '.' are not present in package.json`);
+		throw error();
+	}
+
+	let details: AddonDefinition | undefined;
+
+	for (const importPath of [svImport, defaultImport]) {
+		if (!importPath) continue;
 		try {
-			({ default: details } = await import(pkgName));
-		} catch {
-			issues.push(`default export not found`);
+			details ??= await import(importPath).then((m) => m.default);
+		} catch (e) {
+			if (isNodeError(e)) {
+				if (e.code === 'ERR_MODULE_NOT_FOUND') {
+					issues.push('the add-on contains dependencies that are not bundled');
+					throw error();
+				}
+				issues.push(`Failed to import add-on '${importPath}': ${e.message}`);
+			} else {
+				issues.push(`An unknown error has occurred: ${e}`);
+			}
 		}
 	}
 
-	if (!details && issues.length > 0) {
-		throw new Error(
-			`Failed to load add-on '${pkgName}@${pkgVersion}':\n- ${issues.join('\n- ')}\n\n` +
-				`Please report this to the add-on author.`
-		);
+	if (!details) {
+		throw error();
 	}
 
-	return details!;
+	return details;
+}
+
+function isNodeError(err: unknown): err is Error & NodeJS.ErrnoException {
+	return err instanceof Error;
 }
 
 type PackageJSON = {
diff --git a/packages/sv/src/create/shared/+addon/CONTRIBUTING.md b/packages/sv/src/create/shared/+addon/CONTRIBUTING.md
index d5da26c73..dd520ac7c 100644
--- a/packages/sv/src/create/shared/+addon/CONTRIBUTING.md
+++ b/packages/sv/src/create/shared/+addon/CONTRIBUTING.md
@@ -45,4 +45,4 @@ npm publish
 
 ## Things to be aware of
 
-Community add-ons must have `sv` as a `peerDependency` and should **not** have any `dependencies`. Everything else (including `@sveltejs/sv-utils`) is bundled at build time by tsdown.
+Community add-ons must have `sv` as a `peerDependency`. Any `dependencies` declared in `package.json` will not be available at runtime. Everything else (including `@sveltejs/sv-utils`) is bundled at build time by tsdown.