SBA lenders approved 1,056 7(a) loans to commercial and institutional building contractors between October 2023 and June 2026, about $446 million from 194 lenders. The median loan was $180,000, above the national $150,300, at a median rate of 10.5% against 10.25%, and 55.9% went through SBA Express. Acquisitions were 4.8% of loans against 10.4% nationally, at a median of $1,840,000. Lenders decide on the work-in-progress schedule, retainage and payment timing, backlog, and how a new loan sits with the contractor's surety.
| Measure | Commercial and Institutional Building Construction | All industries |
|---|---|---|
| SBA 7(a) loans approved | 1,056 | 162,355 |
| Median loan | $180,000 | $150,300 |
| Middle half of loans | $95,900 – $400,000 | $50,000 – $500,000 |
| Loans of $1 million or more | 10.3% | 12.9% |
| Median rate at approval | 10.5% | 10.25% |
| Middle half of rates | 9.5% – 11.5% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 51 (4.8%) | 16,849 (10.4%) |
| Median acquisition loan | $1,840,000 | $693,000 |
| Lenders that made these loans | 194 | 1,648 |
| SBA 504 loans (real estate, equipment) | 73 | 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
- 1,056 (Oct 2023 – Jun 2026)
- Median loan
- $180,000 (national $150,300)
- Median rate at approval
- 10.5% (national 10.25%)
- SBA Express share
- 55.9% of loans
- Acquisitions
- 51 loans (4.8%), median $1,840,000
- SBA 504
- 73 loans, median $707,000
The figures: a working-capital industry
NAICS 236220 covers general contractors and construction managers building offices, retail, schools, churches, clinics, warehouses that are not industrial plants, and similar buildings, whether new, additions or major renovations. SBA lenders approved 1,056 7(a) loans to them from FY2024 through June 2026, worth $446,418,700, from 194 lenders. The median loan supported 5 jobs.
| Figure | Commercial GCs | National | Reading |
|---|---|---|---|
| Median loan | $180,000 | $150,300 | Somewhat above national |
| Middle half of loans | $95,900 to $400,000 | Few very small loans | |
| 90th percentile | $1,000,000 | ||
| Loans of $1 million or more | 109 (10.3%) | Above the SBA Express limit; each one fully underwritten | |
| Median rate | 10.5% (middle half 9.5% to 11.5%) | 10.25% | Slightly above national |
| Fixed-rate share | 9.9% | Almost all float | |
| SBA Express | 55.9% of loans | More than half, many of them lines and working capital | |
| Start-ups | 2.4% of loans | Lenders and sureties want a record | |
| Acquisitions | 51 (4.8%), median $1,840,000 at 9.5% | 10.4% of loans | Uncommon, and ten times the median loan |
| SBA 504 | 73 loans, median $707,000 | Offices, shops and yards |
SBA Express goes up to $500,000 with a 50% guaranty, and many lenders use it for revolving lines. That 55.9% of loans went through it suggests what commercial contractors mostly borrow for: cash to carry a job between the start of work and the owner's payment. The middle half of loans, $95,900 to $400,000, spans three of SBA's variable rate-cap tiers: base plus 6% from $50,001 to $250,000, base plus 4.5% from $250,001 to $350,000 and base plus 3% above $350,000. See SBA 7(a) vs SBA Express.
The surety is the other creditor
Nearly all public work, and much larger private work, requires performance and payment bonds, and a surety that issues them underwrites the contractor as carefully as a lender does. The owners, and often their spouses, sign a general indemnity agreement that makes them personally liable to the surety for any loss. The surety sets the contractor's bonding capacity mainly from working capital and net worth on reviewed or audited statements.
That creates a tension a borrower has to manage:
- Working capital. A term loan that funds equipment or an acquisition reduces current assets or adds current debt, which can shrink bonding capacity. The same loan used for working capital, and termed out, can increase it.
- Liens. A lender's blanket lien reaches receivables and equipment that the surety also looks to on bonded jobs. Lenders and sureties commonly settle priority in an agreement between them. See intercreditor agreement and blanket lien.
- Guarantees. Every owner of 20% or more personally guarantees an SBA loan, on top of the surety indemnity. The owners are on the hook to both.
The practical rule: talk to the surety before signing a loan. A lender that sees a supportive surety letter reads the file more favorably, and a contractor that loses bonding capacity loses the work that services the loan.
In commercial construction the lender and the surety read the same balance sheet. Plan the loan with both of them.
Reading a commercial contractor's financials
Bonded commercial GCs usually report on the percentage-of-completion method, and sureties often require reviewed or audited statements, which gives lenders better information than in most small-business files. See audited, reviewed and compiled financials. What they read:
| Item | What the lender looks for |
|---|---|
| Work-in-progress schedule | Contract value, estimated and actual cost, percent complete and margin for every open job |
| Gross profit fade | Margins that shrink from estimate to completion suggest estimating or execution problems |
| Over- and underbillings | Heavy overbilling means clients' money is funding the business; underbilling can hide losses |
| Retainage receivable | Money held back until completion; real, but late, and not always lendable |
| Retainage payable | What the GC in turn holds from subcontractors |
| Backlog | Signed, uncompleted work, and its expected margin |
| Customer mix | Public owners pay reliably but slowly; private owners vary |
Payment timing shapes everything. Owners pay monthly pay applications after review, hold retainage until completion, and subcontract terms may be pay-when-paid. A contractor that is profitable on paper can be short of cash mid-project, which is why so much of the borrowing is working capital. Retainage and bonded-job receivables are often excluded or limited in a borrowing base, so an asset-based line may lend less against them than the balance suggests. See lines of credit for general contractors and eligible versus ineligible receivables.
SBA requires debt service coverage of at least 1.15x, and 1.0x globally including the owners. Because a contractor's earnings follow a few large jobs, lenders look across several years and at backlog to judge a normal year.
Buying a commercial contractor
51 loans, 4.8% of the total, financed a change of ownership, at a median of $1,840,000 and a median rate of 9.5%. At that size, the firms bought tend to be established contractors with estimators, project managers, a bonding line and a backlog. Lenders underwrite whether those move to the new owner:
- Bonding. The surety must underwrite the buyer, including new indemnitors. A deal the surety will not support is a deal without its public work.
- Backlog and contracts. Some contracts need the owner's consent to a change of control; see change-of-control consents.
- People and license. Key estimators and project managers, and the license qualifier, need to stay or be replaced.
- SBA terms. At least 10% equity; a seller note counts toward up to half only on full standby for the life of the loan; no earnout to the seller; an independent business valuation where the amount financed, less appraised real estate and equipment, exceeds $250,000, with the purchase loan capped at that value; the seller may consult for up to 12 months, or up to 24 months under SOP 50 10 8.1 from 1 October 2026.
- From 1 October 2026, financial due diligence on every change of ownership, a quality of earnings report on purchases of $3 million or more excluding real estate, 1.25x coverage on historical results, and amortization over no more than 10 years except for real estate.
Larger contractors can outgrow the program: 7(a) loans go up to $5 million, with SBA's guaranty to one borrower capped at $3.75 million. See acquisitions above the SBA limit.
Preparing a commercial contractor's SBA file
SBA's standard 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. For a commercial GC, add:
- The current work-in-progress schedule and the year-end schedules that tie to the statements
- A backlog report with owner, contract value, percent complete and expected margin
- AR and AP agings, with retainage shown separately
- A letter from the surety confirming the bonding line and its support for the loan
- Contractor licenses, and certificates of liability and workers' compensation insurance
- For an acquisition, the letter of intent and the target's latest full year of figures, never an older year
Contractors that have used merchant cash advances between pay applications need to address them first; SBA will not refinance an active advance. See refinancing cash advances for contractors. Contractors on public work may also look at lines of credit for government contractors.
Transparent builds the full lender package, financing model, lender presentation, blind teaser and underwriting memo, in a day once the documents are in, and takes it to the 278 lenders in its book that write SBA 7(a) and 504. On SBA loans the lender pays Transparent, not the borrower. Related codes: industrial building construction and contract home builders.
Common questions
- What SBA loans do commercial general contractors usually get?
- Mostly smaller working-capital loans: 55.9% of loans from October 2023 to June 2026 went through SBA Express, which lenders often use for lines of credit. The median loan was $180,000 at a median rate of 10.5%.
- Will an SBA loan affect my bonding capacity?
- It can. Sureties set capacity largely on working capital and net worth, so a term loan that drains current assets can reduce it, while one that adds working capital can help. Talk to the surety before signing.
- Does retainage count as collateral for a contractor's line of credit?
- Often only partly or not at all. Retainage is paid at completion and bonded-job receivables involve the surety, so many lenders exclude or limit them in a borrowing base.
- Can I buy a commercial construction company with an SBA loan?
- Yes, though it is uncommon: 51 loans, 4.8% of the total, at a median of $1,840,000. The surety must support the buyer, key people and the license qualifier need to stay or be replaced, and the standard SBA equity and seller-note rules apply.
- Do SBA lenders require audited statements from contractors?
- SBA does not, but sureties often require reviewed or audited statements, and lenders use them when they exist. The work-in-progress schedule matters as much as the statements.