SBA loans in Delaware: what lenders approved, and why the rates ran high

Why Delaware paid more

The median Delaware 7(a) loan was approved at 10.75%, half a point above the national median, and the middle half of loans priced between 9.75% and 11.9%. That looks like an expensive market. Read against loan size, it is mostly a small-loan market. SBA caps the spread a lender may charge over the base rate by loan size, and the cap is widest on the smallest loans. A quarter of Delaware loans were $36,000 or less, and half were $100,000 or less.

The acquisition figures make the point. Delaware's 47 change-of-ownership loans had a median of $548,000 and a median rate of 9.5%, well below the state's overall median, consistent with every loan above $350,000 falling under the tightest cap. A larger, well-documented request gives a lender less room and usually less reason to price near the top. Our SBA loan rates page shows the caps in full.

The other Delaware figure worth noticing is how few borrowers fixed their rate: 7.5% of loans. Almost every Delaware SBA borrower carries a rate that moves with the base rate for the life of a loan whose median term is 120 months. That is a reasonable choice when rates are expected to fall and an uncomfortable one when they rise; a borrower should at least ask what a fixed rate would cost. See fixed vs variable rate business loans.

A Delaware company is not always a Delaware business

Many companies are formed in Delaware and operate somewhere else. For an SBA loan, the state of formation matters very little. The figures on this page count loans by the borrower's location in SBA's records, and a lender underwrites where the business actually operates: its customers, its premises, its employees, its collateral. A Delaware LLC that runs a distribution business in Pennsylvania is, for lending purposes, a Pennsylvania business.

What formation does affect is structure. Companies set up with a Delaware holding company over one or more operating companies must show the lender which entity borrows, which guarantees, and how SBA's affiliation rules count the group's size. A real estate entity that owns the building and leases it to the operating company can qualify as an eligible passive company. See SBA affiliation rules, eligible passive company and holdco vs opco borrower.

Half the loans were Express

SBA Express made up 49% of Delaware approvals. Express loans go up to $500,000 with a 50% guaranty, and the lender decides the credit under its own procedures. For a small loan that is efficient. But the lender keeps half the risk, so an Express loan is underwritten much like a conventional one, and pricing on small Express loans can sit near the top of what SBA allows. A request that needs SBA's full guaranty, 75% on loans above $150,000, belongs in a standard 7(a) loan; SBA 7(a) vs SBA Express explains the difference.

66 lenders approved at least one Delaware loan. Start-ups took 17.5% of loans and franchises 8.9%; the median business behind a loan supported four jobs.

Restaurants, gyms, remodelers and repair shops

By loan count, Delaware's five largest SBA industries were full-service restaurants (28), limited-service restaurants (20), fitness and recreational sports centers (18), residential remodelers (17) and general automotive repair (13). Each is read differently.

• Restaurants in the beach towns earn most of their year in a short summer, and a lender will want monthly sales to see how the off-season payments are made. See full-service restaurants.
• Fitness centers are underwritten on membership, churn and the lease; build-out has little value to anyone but the next gym. See fitness centers.
• Remodelers are judged on backlog, deposits held against unfinished jobs and how revenue moves with the housing market. See residential remodelers.
• Auto repair shops bring equipment and often real estate. Lenders ask about the technicians, the shop's reputation and, where the shop owns its site, an environmental review. See general automotive repair.

Buying a business or a building in Delaware

Acquisitions made up 8.2% of Delaware loans, below the national 10.4%. The rules are federal. The buyer needs equity of at least 10% of total project costs, and a seller note counts toward that for up to half only if it is on full standby for the life of the SBA loan; see seller notes and SBA's full-standby rule. SBA prohibits an earnout, and where the amount financed, less appraised real estate and equipment, exceeds $250,000, it requires an independent business valuation. At a median of $548,000, many Delaware acquisitions cross that line.

Under SOP 50 10 8.1, from 1 October 2026 a change of ownership must show debt service coverage of 1.25x on historical results, financial due diligence is required on every change of ownership, and the loan amortizes over no more than 10 years except the real estate share. A target earning 1,250 against new payments of 1,000 meets the new test exactly. How SBA 7(a) loans finance a business acquisition covers the rest.

Only 13 Delaware SBA 504 loans were approved, at a median of $894,000. That is a small number, not a verdict on the program: it finances owner-occupied real estate typically 50% from a bank, 40% from a certified development company and 10% from the borrower, and the business must occupy at least 51% of an existing building. An owner buying a building should price it against a 7(a) real estate loan; see SBA 7(a) vs SBA 504.

SBA, conventional, and preparing the file

With the typical Delaware SBA loan priced above the national median, an established company with strong earnings and hard assets should always price the conventional alternative. Conventional bank lenders commonly look for debt service coverage of at least 1.25x, and a borrower that clears it comfortably may avoid the SBA guaranty fee and SBA's eligibility and use-of-proceeds rules, though a conventional lender will usually still want the owners' guarantees. SBA remains the better tool when the request is mostly goodwill, when collateral is thin, or when a ten-year amortization is what makes the payments work.

The SBA documents are two to three years of business and personal tax returns, a P&L, balance sheet and debt schedule with copies of any notes being refinanced, and a personal financial statement for each 20%+ owner. A Delaware file should add an organization chart for any holding-company structure, monthly revenue for a seasonal business, and, for an acquisition, the target's latest full year of figures and the letter of intent.

Transparent's lender book holds 1,800+ lenders, 278 of which write SBA 7(a) and 504 and 1,148 of which write term and private credit, so SBA and conventional offers can be compared on the same file. Once the documents are in, Transparent builds the full lender package, a financing model, lender presentation, blind teaser and underwriting memo, in a day; built by hand, it takes at least a week. Transparent charges nothing before a loan closes, and on SBA loans the lender pays Transparent, not the borrower. How we underwrite explains what lenders see.