SBA lenders approved 126 7(a) loans to electrical apparatus, wiring supply and related equipment wholesalers (NAICS 423610) between October 2023 and June 2026, worth $107,177,700 from 57 lenders. The median loan was $382,500 against $150,300 nationally, at a median rate of 10.5% (national 10.25%). Acquisitions made up 19.8% of loans, at a median of $1,063,000, and 26 more loans went through SBA 504. Lenders focus on inventory quality, how much the business depends on a few contractors, and whether its supplier lines survive a change of owner.
| Measure | Electrical Apparatus and Equipment, Wiring Supplies, and Related Equipment Merchant Wholesalers | All industries |
|---|---|---|
| SBA 7(a) loans approved | 126 | 162,355 |
| Median loan | $382,500 | $150,300 |
| Middle half of loans | $150,000 – $975,000 | $50,000 – $500,000 |
| Loans of $1 million or more | 25.4% | 12.9% |
| Median rate at approval | 10.5% | 10.25% |
| Middle half of rates | 9.5% – 11.44% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 25 (19.8%) | 16,849 (10.4%) |
| Median acquisition loan | $1,063,000 | $693,000 |
| Lenders that made these loans | 57 | 1,648 |
| SBA 504 loans (real estate, equipment) | 26 | 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
- 126 from 57 lenders (Oct 2023 – Jun 2026)
- Median loan
- $382,500 (national $150,300)
- Median rate at approval
- 10.5% (national 10.25%)
- Acquisitions
- 25 loans (19.8%), median $1,063,000 at 9.75%
- Loans of $1 million or more
- 32 (25.4%)
- SBA 504
- 26 loans, median $1,065,000
What the SBA figures say about electrical distributors
NAICS 423610 covers merchant wholesalers of electrical apparatus and wiring supplies: the counter-and-warehouse distributors that sell wire and cable, conduit, breakers, panels, switchgear, transformers, motors, lighting and fittings, mostly to electrical contractors, industrial plants and facilities departments. They take title to what they sell and hold it in stock. A firm that only arranges sales for a manufacturer on commission is an agent, with its own code; see SBA loans for wholesale trade agents and brokers.
From FY2024 through June 2026, 57 lenders approved 126 7(a) loans to these distributors, worth $107,177,700. That is a large dollar total for a modest count, and the table shows why: the loans are big.
| Figure | Electrical wholesalers | National | What it suggests |
|---|---|---|---|
| Median loan | $382,500 | $150,300 | More than twice the typical SBA loan |
| Middle half of loans | $150,000 to $975,000 | Even the bottom quarter starts near the national median | |
| 90th percentile | $2,732,000 | Well into purchases and building loans | |
| Loans of $1 million or more | 32 (25.4%) | One loan in four is seven figures | |
| Median rate | 10.5% (middle half 9.5% to 11.44%) | 10.25% | Close to national despite the larger size |
| Fixed-rate share | 12.7% | Most loans float with the base rate | |
| Acquisitions | 25 loans (19.8%), median $1,063,000 at 9.75% | 10.4% | Nearly twice the national share of purchases |
| Start-ups and franchises | 1.6% each | Almost everyone borrowing is established | |
| SBA Express | 38.9% of loans | Smaller lines and equipment loans | |
| SBA 504 | 26 loans, median $1,065,000 | Distributors buy their warehouses |
Three things stand out. Start-ups barely register at 1.6%: nobody opens an electrical supply house on an SBA loan, because it takes supplier authorizations, credit lines from manufacturers and a contractor following before the first sale. The acquisition share is nearly double the national figure, which is what a mature, owner-founded industry with retiring owners looks like. And 26 loans went through SBA 504, a lot relative to 126 7(a) loans, because a distributor's warehouse is a building it can own and occupy. For how the two programs divide the work, see SBA 7(a) vs 504.
Inventory and receivables: what an electrical distributor is worth to a lender
An electrical wholesaler's balance sheet is mostly two things: stock on the shelves and money owed by contractors. Both are collateral, and both need reading carefully.
Inventory. Commodity wire, cable and conduit are liquid; another distributor will buy them. Copper-bearing products also move with copper prices, so the same reel can be worth noticeably more or less between two balance sheets, and margins swing with it. Specialty gear, special-order switchgear and slow-moving lighting are another matter: they may be worth little outside the customer they were ordered for. A lender will want an inventory report that separates fast movers from aged and special-order stock. Asset-based lenders typically advance up to 85% of net orderly liquidation value, or roughly half of cost; see inventory advance rates.
Receivables. Contractors pay their supplier when the general contractor or owner pays them, which in construction can be slow. Invoices past 90 days are typically ineligible for a borrowing base, and a borrowing base commonly caps any one customer at 20% to 25% of eligible receivables. A distributor that uses lien rights or joint-check arrangements on big jobs has better-protected receivables, and a lender will want to see that process in the file. More in eligible vs ineligible receivables.
Most distributors need two facilities: term debt for the purchase or the building, and a revolving line for inventory and receivables. Plan both together.
The 7(a) loan usually carries the long-term piece, and the working-capital piece sits on a line: an SBA line through CAPLines, a bank line, or an asset-based facility. Asset-based lenders typically advance 80% to 90% of eligible receivables. See lines of credit for wholesale distributors and how a borrowing base works.
What lenders worry about in this industry
| Concern | Why it matters here | What answers it |
|---|---|---|
| Contractor concentration | A few large electrical contractors can be most of the sales, and their work is tied to construction cycles | Sales by customer for three years, and the share of the top five |
| Supplier authorizations | The right to sell major manufacturers' lines is often personal to the owner or terminable on a sale | Copies of distribution agreements and the manufacturers' consent to a new owner |
| Copper and price swings | Revenue and margin rise and fall with commodity prices, not just volume | Gross margin by year, with the reason for each move |
| Inventory quality | Aged and special-order stock may be worth little in a liquidation | An inventory report by age and product line |
| Construction slowdowns | Nonresidential and residential building drive demand | The mix of new construction, maintenance and industrial repair sales |
| Counter staff and inside sales | Relationships with contractors often sit with a few salespeople | Who handles the top accounts, and how long they have been there |
Maintenance, repair and industrial work steadies a distributor through building slowdowns; a business that sells mainly into new construction swings harder. Lenders read that mix into the cash flow they are willing to count. The electrical contractors who buy from these distributors have a page of their own: SBA loans for electrical contractors.
Buying an electrical supply house with an SBA loan
With 25 acquisition loans at a median of $1,063,000 and a median rate of 9.75%, buyers are a large part of this market. The acquisition rate sits below the industry median, which fits their size: SBA's rate caps tighten as loans grow, to the base rate plus 3% above $350,000. The purchase almost always crosses SBA's valuation threshold: 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. See SBA's business valuation requirement.
- Equity. At least 10% of total project costs for a complete change of ownership. A seller note counts toward up to half of it only on full standby for the life of the SBA loan; otherwise it is debt in the coverage test. See seller notes and SBA's standby rule.
- Inventory at close. The price usually assumes a normal level of stock and receivables. Define it in the purchase agreement, and have the lender size the loan to the same number; see the working capital peg.
- Supplier consents. Lenders want to know the key lines transfer. Get the manufacturers' position early; see change-of-control consents.
- Coverage. SBA requires debt service coverage of at least 1.15x; from 1 October 2026 a change of ownership must show 1.25x on historical results, and financial due diligence is required on every change of ownership, with a quality of earnings report where the acquisition is $3 million or more excluding real estate.
- Seller transition. The seller may consult for up to 12 months after a complete change of ownership (up to 24 months under SOP 50 10 8.1 from 1 October 2026), but not stay as an owner, officer or employee. For a business built on the founder's contractor relationships, the handover plan matters.
A worked example: a distributor earning 1,500 a year before debt service, against proposed annual payments of 1,150 on the acquisition loan, with the seller note on full standby, covers at about 1.3 times, which clears both SBA's current floor and the 1.25x a change of ownership will need from October. If the seller note were paying, its payments would join the 1,150 and the coverage would fall. Larger purchases run into SBA's $5 million loan limit; see acquisitions above the SBA limit.
Preparing a distributor's SBA file
SBA's core documents apply: two to three years of business tax returns, a P&L and balance sheet, a year-to-date P&L through last month-end, a debt schedule with copies of any notes being refinanced, personal tax returns and a personal financial statement from each owner of 20% or more, who will also personally guarantee the loan. A distributor's file is stronger with three additions: an accounts receivable aging by customer, an inventory report by age, and sales by customer and by manufacturer line. For an acquisition, add 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 235 of which write asset-based lending and lines. Once the documents are in, Transparent builds the full lender package, financing model, lender presentation, blind teaser and underwriting memo, in a day. Built by hand, the same package takes at least a week. On SBA loans the lender pays Transparent, not the borrower. See the package and current pricing on SBA loan rates.
Common questions
- How large are SBA loans to electrical supply wholesalers?
- The median 7(a) loan approved from October 2023 to June 2026 was $382,500, more than twice the national median of $150,300. The middle half ran from $150,000 to $975,000, and 32 of 126 loans were $1 million or more.
- Can an SBA loan buy an electrical distributor?
- Yes. Acquisitions were 19.8% of 7(a) loans to this industry, 25 loans at a median of $1,063,000. Expect a business valuation, at least 10% equity, personal guarantees from every 20% owner, and questions about whether the major supplier lines transfer to the new owner.
- Will a lender count my inventory as collateral?
- Yes, but not at cost. Commodity wire and conduit count for more than special-order or aged stock. Asset-based lenders typically advance up to 85% of net orderly liquidation value, or roughly half of cost.
- Should the warehouse be financed with 7(a) or 504?
- Either can work. SBA 504 is built for owner-occupied real estate, typically 50% from a bank, 40% from the CDC and 10% from the borrower, and the business must occupy at least 51% of an existing building. 26 distributors used 504 in the period, at a median of $1,065,000.
- Does a big contractor customer hurt my application?
- It raises questions rather than ending the file. Lenders want to see how long the relationship has run, how the customer pays, and what happens to cash flow if it slows. A borrowing base will usually limit how much one customer's receivables can support.