LOANBOX SUPPORT
Click Icons or Type Key Word to Search
LOANS
FAQ
INSIGHTS
SUPPORT
ANALYTICS
LOANOLOGY
Most Business Borrowers Initially Contact Low Probability Lenders
Small business owners often start their SBA loan journey by reaching out to the lender least likely to approve their application. It’s a systemic issue nationwide: selecting the right SBA lender is a challenge many entrepreneurs don’t even realize they’re facing.
Are You Too Big for an SBA Loan? Not Likely.
The SBA loan program is a popular option for small businesses seeking funding for growth and expansion. But there is a catch: your business must meet size requirements to qualify. We’ll explain the SBA's size standards and how they apply to you.
SBA Lending to Existing Businesses > 2 Years Old
Existing businesses over 2 years old is by far the biggest recipient of SBA loans in general but the smallest recipient when it comes to franchise lending. Established business loans have accounted for 42% to 49% of funded SBA loans over the last few years. In FY2024, 45% of funded SBA 7(a) loans went to established businesses while only 15% of SBA lending went to established franchise businesses over 2 years old.
FY 2024 SBA Lending Statistics
5,655 banks all-time funded an SBA 7(a) loan, 2,896 over the last decade, and 1,277 banks funded an SBA loan over the last 12 months.
Out-of-State Banks Dominate SBA Lending
72% of funded SBA 7(a) loans over the last year (FY 2024) were funded by out of state lenders. Out of state lenders were responsible for even a higher percentage of franchise lending with 81% funded franchise SBA loans.
Top Franchise Brands in SBA Lending
In FY2024 there were 5,572 franchise loan approvals and 3,680 were funded for a total of $2.7 billion and an average loan amount of $722,652. There were 1,115 different franchise brands with borrowers having an SBA 7(a) funded loan. This article highlights the top franchise brands in SBA lending.
Change of Ownership Loans in 2024
Change of ownership is a business age category tracked by the SBA. The SBA has specific and different rules for each type of loan where ownership changes hands. During FY 2024 there were 627 banks funding 4,151 change of ownership loans for $4.8 billion with an average loan amount of $1,158,934.
SBA Lending to New Businesses Under 2 Years Old
Securing a loan as a new business can be particularly challenging. Traditional lenders often hesitate to finance young companies with limited operating history and unproven revenue streams. These lenders prioritize established businesses with a track record of success and a demonstrable ability to repay debt.
Are Local Banks Good for SBA loans?
When a small business owner thinks they want to apply with their current or a local bank it is primarily based on prioritizing familiarity. “I’m familiar with this specific bank because I drive by it on the way to the office”. Or, “the local branch I bank at is familiar with me so I have the best chance of my loan getting approved with them”.
1% of SBA Banks Fund Half the Loans
SBA lending is a lending specialty some lenders have made a special focus and have dedicated the resources and people to maximize how many SBA loans they can close annually.
With SBA’s extensive rules and requirements, success in this space demands a well-rounded combination of expertise, credit risk acumen, and a robust business development network.
To understand what and where the top SBA lenders are focused on, we analyzed the collective performance of the most recent top 1% SBA lenders. We looked at their combined top industries, franchise loan industries, states and cities, the emphasis on out of state lending, average loan amounts, and our SBA lending forecast model for combined lenders in the one percent.
Startup Business Loans in 2024
Startup business loans is a popular loan purpose in SBA lending. While it varies by year, startup loans account for just under 20% of all SBA 7(a) loans and nearly 40% of the franchise funded loans over the last year.
SBA Franchise Lending in 2024
457 banks funded 3,680 franchise loans for $2.7 billion to franchise borrowers from 1,115 different brands in 222 industries. The average loan amount funded was $722,652. SBA franchisee loans were funded in all 50 states to borrowers from 1,633 cities. 81% of SBA franchisee loans were funded for a project state which is different than the bank’s state. The average bank spread over the prime rate was 2.37%. Franchise business loans accounted for 13% of all funded SBA 7(a) dollars.
LoanBox is the Business Owner's Crystal for Selecting a Lender
Getting it right the first time holds immense value for small business owners. LoanBox empowers entrepreneurs to select the right business loan and lender, from the outset. This is why LoanBox shines for big small business loans, when delays from not getting it right can result in losing out on the deal all together. Use LoanBox to get your big small business loan done right, with the right lender, the first time around.
A Dozen Ways SBA Lenders Differ
From our experience, the biggest misperception by far about SBA lenders is that they are all pretty much the same. After all, how different can an SBA loan be from one lender to the next? The truth is that while the SBA is the same for all, SBA lenders are very different from each other, and many are different in many ways.
3 Essential Questions for Choosing the Right Lender for Your Business Loan
3 Essential Questions for Choosing the Right Lender for Your Business Loan
Selecting the right lender the first time can be complex, but it ultimately boils down to three key questions about how the bank relates to you at this moment in time for your current situation and circumstances. At LoanBoxBox, we match businesses with SBA lenders based on three primary categories: experience, focus, and criteria. For franchise borrowers we add a fourth component which is brand familiarity.
Not All SBA Loans or Lenders Are Created Equal
Understanding the landscape of SBA lending is crucial for small business owners navigating their financing options. The SBA is working to make its lending process more accessible and streamlined, as reflected in their recent updates to standard operating procedures (SOPs). A significant change you’ll notice is the phrase “do what you do,” which appears six times more often in the new SOPs. This shift promotes greater lender autonomy, allowing them to exercise more discretion in key areas and fostering a more dynamic lending environment.
House Collateral and SBA Loans: What Small Business Owners Should Know
SBA loans come with their own set of pros and cons, and for borrowers with substantial home equity, one major downside is the SBA’s personal property collateral rule. Specifically, for loans exceeding $500,000, if you have 25% equity in any personal real estate—whether that’s your home or an investment property—that equity has to be used as collateral, potentially up to the full loan amount. Notably, SBA lenders are instructed to deduct 15% from the appraised value of your residential property before calculating your equity ownership ratio.
What Small Business Owners Should Know About SBA Loan Guaranties & Guarantors
Understanding loan guaranties is crucial for small business owners, as they are key components of securing financing. Sometimes, bank requirements for guaranties can catch applicants off guard, especially if they weren't anticipating this requirement. This article outlines essential information regarding SBA loan guaranties tailored for small business owners.
Navigating Your Existing EIDL Loan and Lien
If you're a small business owner, understanding how to manage your Economic Injury Disaster Loan (EIDL) is crucial, especially if you're considering applying for a new loan. According to the latest Standard Operating Procedure (SOP) 50 10 7.1 from the SBA, any EIDL approvals over $25,000 come with a lien on your business assets. This applies to both loans and advances received through the COVID-19 EIDL program.
Understanding Spousal Guaranty Requirements for SBA Loans
As a small business owner, you might be wondering about how your business loan will affect your spouse and shared assets. We're breaking down the essentials of spousal guaranties and the recent changes from the SBA you need to know.