Custom programming firms took 839 SBA 7(a) loans between October 2023 and June 2026, about $363 million from 132 lenders. The median loan was $185,000, above the national $150,300, at a median rate of 10.5%, a quarter point over the national median, and only 9.1% of loans were fixed-rate. Almost none were start-ups. Lenders underwrite these firms on contracted revenue, customer concentration and the people who deliver the work. Firm purchases were rare but large: 33 loans at a median of $1,570,500.
| Measure | Custom Computer Programming Services | All industries |
|---|---|---|
| SBA 7(a) loans approved | 839 | 162,355 |
| Median loan | $185,000 | $150,300 |
| Middle half of loans | $93,500 – $354,300 | $50,000 – $500,000 |
| Loans of $1 million or more | 9.9% | 12.9% |
| Median rate at approval | 10.5% | 10.25% |
| Middle half of rates | 9.75% – 11.5% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 33 (3.9%) | 16,849 (10.4%) |
| Median acquisition loan | $1,570,500 | $693,000 |
| Lenders that made these loans | 132 | 1,648 |
| SBA 504 loans (real estate, equipment) | 18 | 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
- 839 (Oct 2023 – Jun 2026)
- Median loan
- $185,000 (national $150,300)
- Median rate at approval
- 10.5% (national 10.25%)
- SBA Express share
- 36.9% of loans
- Firm purchases
- 33 loans, median $1,570,500
- Start-ups
- 4.3% of loans
What the approvals show
Custom computer programming services (NAICS 541511) are firms that write software to a client's specification: application and web development, integration work, custom platforms built under contract. From FY2024 through June 2026 they took 839 SBA 7(a) loans worth $363,079,800, from 132 lenders. Firms that sell their own packaged software are classified separately; see SBA loans for software publishers.
The loans cluster tightly. The middle half ran from $93,500 to $354,300, a narrow band, and the top tenth started at $993,400. Only 83 loans (9.9%) reached $1 million. This is working-capital lending for established firms: 4.3% of loans went to start-ups and 1.2% to franchises, and more than a third, 36.9%, were SBA Express loans of up to $500,000.
| Figure | Custom programming | Reading |
|---|---|---|
| Loans / lenders | 839 from 132 lenders | A narrow lender field for the loan count: not every SBA lender wants asset-light credits |
| Median loan | $185,000 | Above the national $150,300 |
| Middle half | $93,500 to $354,300 | Tight: payroll bridges, working capital and refinancing |
| Loans of $1 million or more | 83 (9.9%) | Where most of the firm purchases sit, beside larger working-capital and refinancing loans |
| Median rate | 10.5% (middle half 9.75% to 11.5%) | Above the national 10.25%: no hard collateral behind most loans |
| Fixed-rate share | 9.1% | Nearly every loan floats |
| Acquisitions | 33 loans (3.9%), median $1,570,500 at 9.5% | Few, but priced lower and sized far larger than the rest |
| SBA Express | 36.9% of loans | Lenders handle smaller requests on their own credit process |
| SBA 504 | 18 projects, median $608,500 | Few firms own their offices |
Why the rate runs higher here
The median rate of 10.5% and the middle half reaching 11.5% both sit above the national figures, even though the median loan here is larger than the national one. The caps leave the room: most loans fall in the size bands where SBA allows a wider spread, base rate plus 6% from $50,001 to $250,000 and plus 4.5% from $250,001 to $350,000. What leads lenders to use more of that room is the balance sheet. A development firm's assets are receivables, laptops and a lease. If the business fails, there is little for the lender to recover beyond the guaranty and the owners' personal assets, and lenders price for that.
Acquisition loans show the other side. They are larger, fall under the tightest cap of base rate plus 3% above $350,000, and come with a valuation and a full underwriting of the target; they priced at a median of 9.5%. For how the caps work, see SBA maximum interest rate, and for current pricing across lenders, SBA loan rates.
What a lender reads in a development firm
With no collateral to lean on, the lender's whole case is that revenue will keep coming. The questions that decide it are about where the revenue comes from and how firmly it is held:
| Revenue type | How a lender reads it | What to show |
|---|---|---|
| Monthly retainer or managed-service agreement | The strongest: recurring, with notice periods | Signed agreements, renewal history, notice terms |
| Time-and-materials under a master agreement | Good if the client relationship is long and the hours steady | Hours billed by client by month over two or three years |
| Fixed-price projects | Lumpy; profit depends on estimating well | Project list with budget against actual, and the backlog of signed work |
| Subcontract to a larger integrator | Depends on the prime contractor keeping its contract | The subcontract, the prime's contract term, payment history |
| Staff augmentation | Closer to staffing than software; margin is the spread on each person | Bill rates against pay rates, contractor agreements, client count |
- Customer concentration. A firm with one enterprise client providing most of its revenue is one procurement decision from a different business. Lenders want the top clients by revenue for several years and the contract terms behind each. See customer concentration and debt.
- The people. The firm's capacity is its developers. Lenders ask about turnover, how much of the work runs through contractors or offshore teams, and whether the owner is still the lead architect on the largest accounts.
- Who owns the code. Under most development contracts, the work belongs to the client on delivery. Any reusable platform or library the firm owns outright is worth identifying, because it is one of the few assets with value of its own.
- Revenue recognition. Fixed-price work billed in advance, or recognized ahead of billing, can make a P&L look smoother than the cash. Lenders reconcile revenue to deposits.
Working capital: when a line fits better than a term loan
A common reason development firms borrow is timing. Developers are paid every payroll; enterprise clients pay on their own terms, often slowly. A growing firm finances that gap out of its own cash until it cannot. A term loan fixes the problem once; a line of credit tracks it as the firm grows.
Receivables from large, creditworthy clients are the one asset here that lenders will advance against. Asset-based lenders typically advance 80% to 90% of eligible receivables, receivables more than 90 days past invoice are typically ineligible, and borrowing bases commonly cap any single customer at 20% to 25% of eligible receivables. That last limit is where a concentrated firm finds its line smaller than expected. See lines of credit for IT services companies and SBA CAPLines vs a conventional line.
Buying a development firm
Only 33 loans, 3.9% of the total against 10.4% nationally, financed a change of ownership, but their median of $1,570,500 is more than eight times the industry median. Almost all of that price is goodwill: the client relationships and the team. That shapes the whole SBA process.
- Valuation. Where the amount financed, less appraised real estate and equipment, exceeds $250,000, SBA requires an independent business valuation, and the loan for the purchase cannot exceed it. In a firm with no real estate and little equipment, that is nearly every purchase.
- No earnout. Sellers of software firms often expect part of the price to depend on clients staying. SBA prohibits an earnout in a change of ownership it finances. The usual substitute is a seller note, which can count for up to half of the 10% equity injection, but only on full standby for the life of the loan. See earnout vs seller note.
- Seller transition. The seller may not stay as an owner, officer or employee, but may consult for up to 12 months, rising to 24 months for loans under SOP 50 10 8.1 from 1 October 2026. Where clients know the seller personally, the longer window matters.
- New rules from 1 October 2026. Financial due diligence becomes required on every change of ownership, a quality of earnings report on acquisitions of $3 million or more excluding real estate, and coverage of 1.25x on historical results. The median purchase here sits under the quality of earnings line, but larger firms will cross it.
The lender will want the target's latest full year of figures, never an older year, the letter of intent, revenue by client over several years, and the key employees' intentions. See financing an IT services company acquisition and customer concentration in an acquisition.
In a development firm purchase, the lender is financing client relationships and a team. Every document that shows both will stay is worth more than a projection.
Preparing a development firm's 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 any notes being refinanced, and personal tax returns and a personal financial statement for each owner of 20% or more. Bank statements and a use-of-proceeds narrative help.
For this industry, add revenue by client for each year, the master agreements and statements of work for the largest clients, an AR aging by customer, and a headcount summary separating employees from contractors. If the firm owns a reusable platform, a short description of what it is and who uses it answers a question lenders will otherwise ask.
Transparent builds the file into a full lender package — financing model, lender presentation, blind teaser and underwriting memo — in a day once the documents are in. Not every lender wants an asset-light credit, and 839 loans from 132 lenders suggests a narrow field. Of the 278 lenders in Transparent's book that write SBA 7(a) and 504, the package goes to those whose appetite fits, with conventional and private lenders alongside where the firm is too large or too concentrated for SBA. On SBA loans the lender pays Transparent, not the borrower.
Common questions
- Can a software development firm get an SBA loan without collateral?
- Yes. SBA does not decline a loan only because collateral falls short, and 839 loans went to custom programming firms from October 2023 to June 2026. The lender will take the collateral that exists, which can include owners' personal assets, and prices the loan on cash flow.
- What interest rate do programming firms pay on SBA loans?
- The median rate at approval was 10.5%, with the middle half between 9.75% and 11.5%, against a national median of 10.25%. Acquisition loans, which are larger, priced at a median of 9.5%.
- Can I use an earnout when buying a development firm with an SBA loan?
- No. SBA prohibits an earnout to the seller in a change of ownership it finances. A seller note is the usual substitute; it can count for up to half of the equity injection, but only if it is on full standby for the life of the loan.
- How does customer concentration affect an SBA loan for my firm?
- It is the question lenders ask first. A firm dependent on one or two clients will be asked for those contracts and their terms, and on a line of credit a single customer is commonly capped at 20% to 25% of eligible receivables.
- Is SBA Express a good fit for a development firm?
- For smaller needs, often. 36.9% of loans in this industry were SBA Express, which goes up to $500,000 with a 50% guaranty and runs on the lender's own credit process. Larger loans and purchases go through standard 7(a).