SBA lenders approved 494 7(a) loans to drywall and insulation contractors from October 2023 through June 2026, $168,520,700 from 114 lenders. The median loan was $150,000, level with the national $150,300, but more than half (52.6%) went through SBA Express and nearly one in five (18%) went to start-ups. The median rate was 10.5% against 10.25% nationally. Acquisitions were rare, 4.9% of loans against 10.4% nationally, but large, at a median of $1,175,000. Lenders decide these loans on the owner's record running crews and on how reliably builders and general contractors pay.
| Measure | Drywall and Insulation Contractors | All industries |
|---|---|---|
| SBA 7(a) loans approved | 494 | 162,355 |
| Median loan | $150,000 | $150,300 |
| Middle half of loans | $50,000 – $323,000 | $50,000 – $500,000 |
| Loans of $1 million or more | 6.5% | 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) | 24 (4.9%) | 16,849 (10.4%) |
| Median acquisition loan | $1,175,000 | $693,000 |
| Lenders that made these loans | 114 | 1,648 |
| SBA 504 loans (real estate, equipment) | 30 | 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
- 494 (Oct 2023 – Jun 2026), from 114 lenders
- Median loan
- $150,000 (national $150,300)
- Median rate at approval
- 10.5% (national 10.25%)
- SBA Express / start-ups
- 52.6% / 18% of loans
- Acquisitions
- 24 loans (4.9%), median $1,175,000
- SBA 504
- 30 loans, median $625,500
The approvals, read against the national figures
Drywall and insulation contractors (NAICS 238310) hang and finish gypsum board, apply plaster and stucco systems, install acoustical ceilings, and install insulation, from batts and blown-in attic work to spray foam. The median loan in this code supported 5 jobs, which understates the workforce, because a large share of the trade's labor is subcontracted crews paid by the board or by the square foot.
| Figure | Drywall and insulation | What it tells a borrower |
|---|---|---|
| Loans / total / lenders | 494 / $168,520,700 / 114 | A mid-sized SBA market with plenty of lenders active in it |
| Median loan | $150,000 | Level with the national $150,300 |
| Middle half of loans | $50,000 to $323,000 | Trucks, rigs, lifts and working capital |
| 90th percentile | $654,900 | Only a thin top end |
| Loans of $1 million or more | 32 (6.5%) | Where acquisitions and property purchases sit |
| Median rate (middle half) | 10.5% (9.75% to 11.5%) | Small loans sit under higher SBA rate caps |
| Fixed-rate share | 14.4% | Most loans float with the base rate |
| Median term | 120 months | Ten years, the working-capital and equipment standard |
| SBA Express | 52.6% | The majority route |
| Start-ups / franchises | 18% / 11.1% | A trade people enter on their own |
| Acquisitions | 24 loans (4.9%), median $1,175,000 at 10.13% | Under half the national 10.4% share, at a size far above the typical loan |
Two numbers stand out. Nearly one loan in five, 18%, went to a start-up, and the acquisition share is less than half the national figure. In this trade the usual path to ownership is to leave a larger contractor and start a company, not to buy one. That changes what a lender underwrites: the person, more than the business.
Why lenders see so many new drywall and insulation companies
A foreman who has run hanging and taping crews for years already knows how to bid a job, find labor and deal with a superintendent. The capital needed to start is modest: a truck, a trailer, stilts, lifts and banjo tapers for a drywall crew; for spray foam, a proportioner rig built into a box truck or trailer, which is the single largest purchase many insulation start-ups make. That profile fits SBA Express, which goes up to $500,000 with a 50% guaranty and lets the lender decide on its own credit process.
A start-up must inject equity of at least 10% of total project costs, and every owner of 20% or more personally guarantees the loan. With no operating history to read, the lender reads the owner: years running crews, the general contractors or builders who have already said they will use the new company, and whether the owner has bid and managed jobs or only swung a hammer on them. That history belongs in the resume that supports SBA Form 1919, written as jobs, customers and crew sizes rather than a job title.
Franchises made up 11.1% of loans. The franchise systems in this trade sell mainly to homeowners, such as insulation and energy-efficiency brands and drywall repair services. A franchise gives the lender a lead-generation model and a track record to underwrite, but the lender still reviews the franchise agreement for eligibility, and a homeowner-facing insulation business is judged on marketing cost and close rates, not on builder relationships. See SBA 7(a) vs SBA Express for when the full 7(a) process is worth the extra time.
How an underwriter reads a wall-and-ceiling contractor
Drywall sits in the middle of the construction schedule. The contractor is paid after framing and before paint and flooring, usually by a general contractor or builder who is waiting on its own draw. That position shapes every cash-flow question a lender asks.
| Type of work | How the contractor gets paid | What the lender looks at |
|---|---|---|
| Production residential for builders | Per-house billing when board is hung and finished | Concentration in a few builders, their closing pace, and how fast they pay in a slow market |
| Commercial for general contractors | Monthly progress billings, less retainage held until project close | Retainage receivable, pay-when-paid clauses, change orders, bonding, job margin fade |
| Insulation for builders | Per-house, often on the same builder schedules as drywall | Material cost swings and whether the contractor can pass them through |
| Retrofit insulation for homeowners | Deposit at signing, balance at completion, sometimes tied to utility rebate paperwork | Lead cost, deposits held as working capital, warranty claims |
On commercial work the lender will want a work-in-progress schedule: contract value, billed to date, cost to date and estimated cost to complete for each open job. It shows whether the contractor is billing ahead of or behind its work, and whether margins on finished jobs matched the bid. A contractor whose revenue grows while completed-job margins shrink is buying work, and lenders read that as a warning. Retainage deserves its own line in the receivables aging, because it is real money that will not arrive until the building is finished and the punch list is closed.
Labor is the second question. Contractors that pay crews as independent contractors show higher margins on paper, and lenders ask whether that model is stable and whether a workers' compensation audit or a misclassification claim could land on the business.
Retainage, change orders and pay-when-paid terms are where drywall cash flow goes to wait. Show them separately and the lender does not have to guess.
Buying a drywall or insulation company: few deals, large ones
Only 24 loans financed a change of ownership, 4.9% of the industry's total, and their median was $1,175,000 at a median rate of 10.13%. Small drywall companies rarely sell: there is little to buy beyond the owner's relationships. The companies that do change hands are established commercial contractors with estimators, project managers, surety bonding and a record with general contractors who invite them to bid.
Those are exactly the assets that do not transfer on a bill of sale. A buyer should find out whether the bonding company will extend the same capacity to new owners, which general contractors will keep the company on their bid lists, and whether the estimator and superintendents are staying. The seller cannot remain as an owner, officer or employee, but may consult for up to 12 months, or up to 24 months under SOP 50 10 8.1 from 1 October 2026. See SBA seller transition and buyer industry experience requirements.
At a median of $1,175,000, most of these purchases need an independent business valuation: SBA requires one where the amount financed, less appraised real estate and equipment, exceeds $250,000, and the loan cannot exceed it. The buyer needs at least 10% of total project costs as equity; a seller note can supply up to half of that only if it is on full standby for the life of the loan, and SBA prohibits an earnout to the seller. From 1 October 2026 the purchase must show 1.25x debt service coverage on historical results, financial due diligence is required on every change of ownership, and a quality of earnings report is required at $3 million or more excluding real estate. See seller notes and SBA's standby rule.
Buildings and equipment
Thirty SBA 504 loans went to the industry, at a median of $625,500. That is the contractor that has outgrown a rented yard: a warehouse for board and insulation stock, parking for trucks and trailers, a shop for rig maintenance. 504 finances owner-occupied real estate with typically 50% from a bank, 40% from a CDC and 10% from the borrower, and the business must occupy at least 51% of an existing building. See SBA 7(a) vs 504.
Rigs, lifts and trucks have resale value, but rarely enough to cover the loan, so the owners' guarantees carry more weight, and where business assets fall short SBA lenders commonly look to the owners' personal real estate. A contractor whose main need is a new rig should compare a dedicated equipment loan with a 7(a); see equipment financing vs SBA 7(a). A contractor whose real problem is waiting on general contractors to pay may be better served by a line; see lines of credit for contractors.
Preparing the file
The SBA list is the starting point: 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. For a drywall or insulation contractor, add:
- A work-in-progress schedule for open commercial jobs, with estimated cost to complete
- A receivables aging with retainage shown separately, by general contractor or builder
- Revenue by customer for the last full year
- Backlog: signed contracts not yet started, with expected start dates
- The surety's bonding letter, if the company bonds its work
- Insurance certificates and the latest workers' compensation audit
- How crews are paid, and quotes for any rigs, lifts or trucks being financed
SBA requires debt service coverage of at least 1.15x, and 1.0x globally once the owners' personal obligations are included; see global cash flow. Contractors that funded board and payroll with merchant cash advances need to deal with them first: SBA will not refinance an active advance, and from 1 October 2026 an advance becomes eligible only once converted to a term loan that has amortized for at least 24 months with no new advance since. See refinancing cash advances for 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.
Common questions
- Can I get an SBA loan to start a drywall company?
- Yes, and many owners do: 18% of SBA loans in this industry went to start-ups. Expect to inject at least 10% of total project costs and to show years of experience running crews and bidding work. Letters or relationships with builders or general contractors who plan to use the new company help.
- Why do so many drywall loans go through SBA Express?
- Because the loans are small and the needs are simple: trucks, lifts, a spray rig, working capital. SBA Express goes up to $500,000 and lets the lender decide on its own process, and 52.6% of loans in this industry used it. The trade-off is a 50% guaranty, so Express lenders lean hard on credit history and filed returns.
- How does retainage affect my loan application?
- It shows up as receivables that will not turn into cash until a project closes. Lenders do not ignore it, but they discount it and look at how much of your working capital is tied up in it. Show retainage separately on your aging so it is not mistaken for slow pay.
- What does it cost to buy an established drywall contractor with SBA?
- The 24 acquisition loans in the period had a median of $1,175,000 at a median rate of 10.13%. Expect at least 10% equity, a business valuation, and close questions about whether bonding capacity and general-contractor relationships will survive the change of ownership.
- Do I need a work-in-progress schedule for an SBA loan?
- If you do commercial work on progress billings, yes in practice. It is the document that shows whether your margins on jobs hold up and whether you are billing ahead of your work. Residential production contractors paid per house usually need only receivables by builder.