SBA lenders approved 405 7(a) loans to architecture firms (NAICS 541310) from October 2023 to June 2026, totaling $148,295,600 from 109 lenders. The median loan, $150,000, is almost exactly the national $150,300; the median rate, 10.5%, is a quarter point above the national 10.25%. Acquisitions were only 4.9% of loans, under half the national 10.4%, at a median of $745,000. Lenders underwrite a practice on fee income across the construction cycle, the quality of receivables and unbilled work, signed backlog, and how much of the client base depends on one principal.
| Measure | Architectural Services | All industries |
|---|---|---|
| SBA 7(a) loans approved | 405 | 162,355 |
| Median loan | $150,000 | $150,300 |
| Middle half of loans | $60,000 – $350,000 | $50,000 – $500,000 |
| Loans of $1 million or more | 7.7% | 12.9% |
| Median rate at approval | 10.5% | 10.25% |
| Middle half of rates | 9.25% – 11.5% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 20 (4.9%) | 16,849 (10.4%) |
| Median acquisition loan | $745,000 | $693,000 |
| Lenders that made these loans | 109 | 1,648 |
| SBA 504 loans (real estate, equipment) | 41 | 16,714 |
Approvals FY2024 – FY2026 to date (1 Oct 2023 – 30 Jun 2026), cancelled loans excluded. Source: SBA 7(a) and 504 FOIA loan records, as of June 30, 2026.
- SBA 7(a) loans approved
- 405 (Oct 2023 – Jun 2026), from 109 lenders
- Median loan
- $150,000 (national $150,300)
- Median rate at approval
- 10.5% (national 10.25%)
- SBA Express share
- 42.2% of loans
- Acquisitions
- 20 loans (4.9%), median $745,000 at 9%
- SBA 504 loans
- 41, median $534,000
What SBA lenders approved for architecture firms
Architectural services took 405 SBA 7(a) loans from FY2024 through June 2026, worth $148,295,600, from 109 lenders. The typical loan sits right at the national median, and the middle half is narrow: $60,000 to $350,000. This is an industry that borrows for working capital, office fit-outs, technology and partner buyouts, not for machinery.
| Figure | Architecture firms | Reading |
|---|---|---|
| Median loan | $150,000 | Level with the national $150,300 |
| Middle half of loans | $60,000 to $350,000 | Working capital and fit-outs |
| 90th percentile | $757,800 | Purchases and offices |
| Loans of $1 million or more | 31 (7.7%) | A thin top tier |
| Median rate at approval | 10.5% (middle half 9.25% to 11.5%) | A quarter point above the national 10.25% |
| Fixed-rate share | 14.3% | Mostly floating |
| Acquisitions | 20 loans (4.9%), median $745,000 at 9% | Under half the national 10.4% share |
| Start-ups | 2.5% of loans | Lenders finance established practices |
| SBA Express | 42.2% of loans | The lender's own process, up to $500,000 |
| SBA 504 | 41 loans, median $534,000 | Firms buying their offices |
The median of $150,000 lands on an SBA threshold. SBA guarantees 85% of standard 7(a) loans of $150,000 or less and 75% above that, but 42.2% of this industry's loans went through SBA Express instead, trading the guaranty down to 50% for the lender's own, simpler process. That mix fits small working-capital borrowing by firms with a median of 4 jobs supported. See SBA 7(a) vs SBA Express.
Why so few practices are bought with SBA
Only 20 loans financed a change of ownership. The small number has explanations lenders will recognize. Clients often hire an architect, not a firm, so goodwill is personal and may not survive a sale. Many states require an architecture firm to be owned or controlled in part by licensed architects, which limits who can buy one outright. And the natural buyer is usually inside the firm: a partner or senior associate taking over gradually, which may be a partial change of ownership rather than an outright sale. See partial changes of ownership under SBA.
The purchases that do happen are sizeable, a median of $745,000, and priced well: a median of 9%, the lowest rate figure in the industry's record, in part because larger loans fall under SBA's tightest cap, the base rate plus 3% above $350,000.
SBA's rules on a full sale are hard on a founder-led practice. The seller may not stay as owner, officer or employee; the seller may consult for up to 12 months, or up to 24 months under SOP 50 10 8.1 from 1 October 2026. For a firm whose clients know the founder, the longer window is useful, but it has to be used to hand relationships over, and lenders will ask how. A seller note counts toward half the 10% equity injection only on full standby for the life of the loan, and SBA prohibits an earnout to the seller, which removes a tool buyers of professional practices often use. See financing an engineering firm acquisition, a close cousin, and earnouts vs seller notes.
What an architecture firm offers a lender
A practice has little hard collateral, and SBA lenders are allowed to lend without full collateral coverage. When the business assets fall short, SBA expects the lender to take what the owners have, including equity in a personal residence where there is enough of it. See SBA personal residence collateral. The table shows how a lender reads each part of the balance sheet.
| Asset | How a lender reads it |
|---|---|
| Billed receivables | The best asset, if clients pay on time. Lenders read the aging by client and discount anything long overdue. |
| Unbilled work in progress | Real value to the firm, little to a lender: it becomes collectible only when the phase is billed and accepted. |
| Retainage | Held back until project completion; lenders treat it as slow and uncertain. |
| Computers, software licenses, furniture | Necessary, with little resale value. |
| Owned office | Strong collateral, and the reason for the industry's 504 loans. |
| Goodwill | The largest asset in a purchase and the one lenders underwrite on cash flow alone. |
Receivables tie the cash cycle together. Architects bill by phase, clients approve invoices on their own schedule, and public-sector work can run long. A firm with slow collections needs working capital even when it is profitable, and that gap is what a small SBA working-capital loan or a line fills. See days sales outstanding and lines of credit for engineering firms.
What lenders worry about
- The construction cycle. Design work comes before building, so fee income falls when owners and developers stop starting projects. Lenders want three years of returns and ask how the firm managed staff in a slow year.
- Project and client concentration. One large commission, or one developer who sends most of the work, can dominate a small firm's revenue. Lenders want fees by client.
- Backlog. Signed contracts not yet billed show next year's revenue. It is the architecture firm's most persuasive document.
- Licensing and liability. Lenders confirm the principals' licenses and the firm's professional liability cover, and ask about any open claims.
- Key people. If one principal brings in most of the fees, the lender may require key-person life insurance and will test cash flow as if that person's pay were at market.
SBA's minimum is 1.15x debt service coverage, 1.0x globally with the owners' personal debts. For a practice, the owners' pay is the swing item: a firm showing earnings of 450 after the principals take modest salaries, against proposed payments of 300, covers 1.5 times; if a lender replaces those salaries with market pay 60 higher, 390 against 300 still clears 1.25x. Present owner compensation plainly and the lender will not need to guess. See debt service coverage ratio.
Preparing an architecture firm's file
SBA's list: business tax returns for 2–3 years, a P&L and balance sheet with a year-to-date P&L through last month-end, a debt schedule with copies of notes being refinanced, and personal tax returns and a personal financial statement for each owner of 20% or more, each of whom personally guarantees the loan. The owner's resume supports SBA Form 1919's management questions. A purchase adds the target's latest full year of figures and the letter of intent.
For a practice, add an AR aging by client with days outstanding, a schedule of signed backlog by project and phase, fee revenue by client for three years, principals' licenses, the professional liability policy, and an ownership plan that shows how licensed ownership is maintained after the deal. If the loan buys an office, the lease or purchase contract and occupancy plan; 504 requires the firm to occupy at least 51% of an existing building.
Transparent builds the full lender package — financing model, lender presentation, blind teaser and underwriting memo — in a day, and places it with the 278 lenders in its book that write SBA 7(a) and 504. On SBA loans the lender pays Transparent, not the borrower. See how we underwrite and related practices: engineering services, landscape architecture and interior design.
Common questions
- Can a non-architect buy an architecture firm with an SBA loan?
- SBA does not require it, but many states require licensed architects to own or control part of the firm. The buyer's ownership plan has to satisfy the state before a lender can rely on it.
- Will a lender lend against unbilled work in progress?
- Rarely as collateral. Lenders look at it as evidence of future billing, and lend against billed receivables and cash flow instead.
- Can I buy out my partner with an SBA loan?
- Yes, SBA can finance a partner buyout. The remaining owner guarantees the loan, and lenders look at whether the practice's clients stay with the firm after the partner leaves.
- Why can't the seller take an earnout?
- SBA prohibits an earnout to the seller in a change of ownership it finances. Buyers use a seller note instead, which counts toward the equity injection only on full standby for the life of the loan.
- Is SBA Express right for a small practice?
- Often, for working capital and fit-outs. 42.2% of this industry's loans used it. Express loans go up to $500,000 with a 50% guaranty.