Engineering firms took 738 SBA 7(a) loans between October 2023 and June 2026, about $438 million from 175 lenders. The median loan was $227,500, well above the national $150,300, at the national median rate of 10.25%, and 115 loans (15.6%) were $1 million or more. Ownership transfers stand out: 95 loans, 12.9%, financed a change of ownership, above the national 10.4%, at a median of $845,000. Lenders underwrite these firms on backlog, client mix, how receivables are collected and who holds the professional license and the client relationships.
| Measure | Engineering Services | All industries |
|---|---|---|
| SBA 7(a) loans approved | 738 | 162,355 |
| Median loan | $227,500 | $150,300 |
| Middle half of loans | $100,000 – $500,000 | $50,000 – $500,000 |
| Loans of $1 million or more | 15.6% | 12.9% |
| Median rate at approval | 10.25% | 10.25% |
| Middle half of rates | 9.25% – 11.25% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 95 (12.9%) | 16,849 (10.4%) |
| Median acquisition loan | $845,000 | $693,000 |
| Lenders that made these loans | 175 | 1,648 |
| SBA 504 loans (real estate, equipment) | 77 | 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
- 738 (Oct 2023 – Jun 2026)
- Median loan
- $227,500 (national $150,300)
- Median rate at approval
- 10.25%, the national median
- Loans of $1 million or more
- 115 (15.6%)
- Ownership transfers
- 95 loans (12.9%), median $845,000
- Start-ups
- 2.8% of loans
What SBA lenders approved for engineering firms
Engineering services (NAICS 541330) covers civil, structural, mechanical, electrical, geotechnical and other engineering practices, from a two-person structural consultancy to a multi-office civil firm. From FY2024 through June 2026 they took 738 SBA 7(a) loans worth $438,002,900, from 175 lenders.
These are established firms borrowing real money. Start-ups were 2.8% of loans and franchises almost none, 0.1%. The median loan of $227,500 is about half again the national median; the middle half ran from $100,000 to $500,000, the top tenth started at $1,718,850, and nearly one loan in six was $1 million or more. At the same time 42.4% were SBA Express loans, which go up to $500,000: most firms borrow modestly for working capital, and a minority borrow large to buy a firm or a partner out.
| Figure | Engineering services | What it tells you |
|---|---|---|
| Median loan | $227,500 | About half again the national $150,300 |
| Middle half of loans | $100,000 to $500,000 | Working capital and equipment at the low end, buyouts at the top |
| Loans of $1 million or more | 115 (15.6%) | The larger firm purchases, plus office real estate and bigger working-capital needs |
| Median rate at approval | 10.25% (middle half 9.25% to 11.25%) | Exactly the national median |
| Fixed-rate share | 12.6% | Most loans float |
| Ownership transfers | 95 loans (12.9%), median $845,000 at 9.5% | Above the national 10.4%: succession drives much of the lending |
| SBA Express | 42.4% of loans | Smaller working-capital needs on the lender's own process |
| SBA 504 | 77 projects, median $675,000 | Firms buying their own offices |
| Median jobs supported | 6 | Licensed engineers, designers and technicians |
Succession is the story in these figures
Ninety-five change-of-ownership loans, at a median of $845,000 and a median rate of 9.5%, make ownership transfer a larger share of engineering lending than of SBA lending overall. The figures do not say who the buyers were, but in engineering the seller is often a founding engineer nearing retirement, and the buyer is often the firm's own senior engineers or a competitor adding a discipline or a region rather than an outside investor.
The buyer shapes the file. A senior engineer who has worked at the firm for years already knows the clients and the projects, which a lender reads as continuity. An outside buyer brings capital but not the relationships. Where several employees buy together, each owner of 20% or more guarantees the loan, and the lender reads each one's personal finances. A founder selling only part of the firm to partners falls under different SBA rules from a complete sale; see financing a partial change of ownership, management buyout financing and, for a sale to an employee ownership plan, ESOP sale financing.
| Buyer | What the lender likes | What the lender asks |
|---|---|---|
| Senior engineers inside the firm | They already deliver the work and know the clients | Whether they can raise the equity injection, and who takes over the founder's business development |
| A competing firm | An operating record and its own licensed engineers | Overlap and loss of clients, integration, combined coverage |
| An outside individual buyer | Capital and management experience | Who holds the license and signs the drawings; how clients transfer |
| An employee ownership plan | Continuity for staff and clients | A different structure and different lenders |
The license and the relationships
Engineering is a licensed profession. State rules govern who may offer engineering services and sign and seal drawings, and some also govern who may own an engineering firm. A buyer who is not a licensed engineer needs a licensed engineer in responsible charge, and the lender will want to know who that is, whether they are staying and whether their compensation is in the numbers.
Client relationships raise the same question in commercial form. Public agencies and developers often choose firms by the people they know. SBA lets the seller consult for up to 12 months after a complete change of ownership, rising to 24 months for loans under SOP 50 10 8.1 from 1 October 2026, but not remain as an owner, officer or employee. For a founder whose name is on the door, the longer window is a real change: more time to introduce the buyer on active projects and pursuits. See SBA seller transition rules and buying from a retiring owner.
In an engineering firm purchase, the lender needs two names settled before it can underwrite: who seals the drawings after closing, and who keeps the clients calling.
Backlog, receivables and the working-capital gap
An engineering firm's revenue is project-based, and much of it is billed in arrears as work progresses. That gives the lender three things to read that a retailer or restaurant never produces.
- Backlog. Signed, unbilled work is the best evidence of next year's revenue. Lenders want it by client and project, with expected billing timing, and compare it with prior years.
- Client mix. Work for public agencies is usually secure but slow to pay; private developers pay faster but stop commissioning work when their own projects stall. A firm heavily tied to one agency or one developer carries concentration risk.
- Receivables and unbilled work. Payroll goes out every cycle while invoices on public work can wait. Receivables more than 90 days past invoice are typically ineligible for a borrowing base, and a firm that bills late or collects slowly shows it in a lender's aging review.
That gap is why working-capital loans make up so much of the smaller end of these figures. A term loan through SBA Express can cover it once; a line of credit against receivables tracks it as the firm grows. Asset-based lenders typically advance 80% to 90% of eligible receivables. See lines of credit for engineering firms and lines of credit for government contractors.
How the SBA rules land on an engineering purchase
The median purchase loan of $845,000 is mostly goodwill, since an engineering firm owns little besides computers, software licenses and survey equipment. SBA requires an independent business valuation where the amount financed, less appraised real estate and equipment, exceeds $250,000, and the purchase loan cannot exceed it. The buyer brings an equity injection of at least 10% of total project costs; a seller note can count for up to half of it, but only on full standby for the life of the loan, and SBA prohibits an earnout. The loan for goodwill runs up to 10 years.
Loans numbered from 1 October 2026 add three requirements for a change of ownership: financial due diligence on every purchase, a quality of earnings report where the acquisition is $3 million or more excluding real estate, and coverage of 1.25x on historical results. A firm whose last year was lighter than its backlog suggests will be judged on the year it had. See financing an engineering firm acquisition and quality of earnings for acquisition loans.
Preparing an engineering firm's file
SBA's standard documents: 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. The buyer's or owner's resume carries weight for Form 1919, especially where it shows licensure.
For an engineering firm, add a backlog schedule by project, revenue by client for several years, an AR aging by customer with unbilled work shown separately, the licensed engineers and their roles, and professional liability coverage. For a purchase, add the target's latest full year of figures, never an older year, and the letter of intent.
Transparent builds that into a full lender package — financing model, lender presentation, blind teaser and underwriting memo — in a day once the documents are in. For buyouts above what SBA will lend, Transparent's book also holds 1,148 lenders that write term and private credit, alongside the 278 that write SBA 7(a) and 504. On SBA loans the lender pays Transparent, not the borrower. See acquisitions above the SBA limit.
Common questions
- Can employees buy out the founder of an engineering firm with an SBA loan?
- Yes, and it is a common use. 95 change-of-ownership loans went to engineering firms between October 2023 and June 2026. Each buyer owning 20% or more guarantees the loan. Where they buy the whole firm, together they need an equity injection of at least 10% of total project costs; a buyout of part of the firm follows SBA's partial change of ownership rules.
- Does the buyer of an engineering firm need to be a licensed engineer?
- Not always, but state rules govern who may offer engineering services and seal drawings, and some govern ownership. The lender will want a licensed engineer in responsible charge who is staying after closing.
- How long can the selling founder stay involved?
- Under SBA rules, as a consultant only: up to 12 months after closing, or up to 24 months for loans under SOP 50 10 8.1 from 1 October 2026. The seller cannot remain an owner, officer or employee.
- What rate do engineering firms pay on SBA loans?
- The median rate at approval was 10.25%, the national median, with the middle half between 9.25% and 11.25%. Purchase loans priced at a median of 9.5%.
- Do lenders count backlog as revenue?
- No, but they read it closely. Signed, unbilled work supports the case that recent results will continue. SBA sizes the loan on historical cash flow, and from 1 October 2026 a change of ownership must show 1.25x coverage on historical results.