SBA lenders approved 129 7(a) loans to human resources consulting firms from October 2023 through June 2026, $28,842,100 from 42 lenders. The median loan was $100,000, below the national $150,300, and the median rate was 10.99% against 10.25% nationally. SBA Express carried 48.1% of loans. Start-ups were only 6.2% and there were no franchise loans. Acquisitions were 3.1% of loans, but their median was $1,080,950. Lenders decide these loans on recurring client revenue, client concentration and the owner's personal guarantee, because there is little else to secure them.
| Measure | Human Resources Consulting Services | All industries |
|---|---|---|
| SBA 7(a) loans approved | 129 | 162,355 |
| Median loan | $100,000 | $150,300 |
| Middle half of loans | $50,000 – $250,000 | $50,000 – $500,000 |
| Loans of $1 million or more | 3.9% | 12.9% |
| Median rate at approval | 10.99% | 10.25% |
| Middle half of rates | 9.75% – 12% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 4 (3.1%) | 16,849 (10.4%) |
| Median acquisition loan | $1,080,950 | $693,000 |
| Lenders that made these loans | 42 | 1,648 |
| SBA 504 loans (real estate, equipment) | 1 | 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
- 129 (Oct 2023 – Jun 2026), from 42 lenders
- Median loan
- $100,000 (national $150,300)
- Median rate at approval
- 10.99% (national 10.25%)
- SBA Express share
- 48.1%
- Acquisitions
- 4 loans (3.1%), median $1,080,950
- Start-ups
- 6.2% of loans; no franchise loans
The approvals against the national figures
Human resources consulting (NAICS 541612) covers firms that advise employers on compensation, benefits design, HR policy and compliance, employee assessment and organizational structure, along with firms that act as a fractional HR department for companies too small to employ one. The median loan supported 4 jobs, which is the shape of the typical borrower: a principal and a handful of consultants.
| Figure | HR consulting | What it tells a borrower |
|---|---|---|
| Loans / total / lenders | 129 / $28,842,100 / 42 | A small SBA market with a fair spread of lenders |
| Median loan | $100,000 | Two-thirds of the national $150,300 |
| Middle half of loans | $50,000 to $250,000 | Working capital, hiring, systems |
| 90th percentile | $500,000 | The SBA Express ceiling marks the top of the usual range |
| Loans of $1 million or more | 5 (3.9%) | At least two of the four acquisitions sit here |
| Median rate (middle half) | 10.99% (9.75% to 12%) | Above the national 10.25% |
| Fixed-rate share | 7.8% | Nearly every loan floats |
| Median term | 120 months | Ten years |
| SBA Express | 48.1% | Close to half of all loans |
| Start-ups / franchises | 6.2% / none | Lenders want a client list before they lend |
| Acquisitions | 4 loans (3.1%), median $1,080,950 at 8.63% | Rare, and priced below the trade's median |
| SBA 504 | 1 loan of $5,386,000 | A single real estate or equipment project |
Lending without collateral
A consulting firm's balance sheet is usually receivables, a little cash, laptops and a lease. None of that covers a loan if the firm stops operating, and receivables from a consultancy that has stopped performing are hard to collect. So the lender relies on three things instead: cash flow, the personal guarantee that SBA requires from every owner of 20% or more, and, on larger loans that business assets do not cover, a lien on the owners' personal real estate where there is equity in it. See SBA personal residence collateral.
That is why SBA Express carries 48.1% of loans here. An Express loan or Express line of credit goes up to $500,000 with a 50% guaranty and is decided on the lender's own process, which fits a firm that needs to fund two new hires or carry receivables through a large implementation project. A consultancy whose clients pay slowly may be better served by a revolving line than a term loan; see line of credit vs term loan and SBA CAPLines.
Cash flow has to cover the loan with room to spare: SBA requires debt service coverage of at least 1.15x, and 1.0x globally once the owners' personal income and obligations are included. In a firm where the principal takes most of the profit as salary and distributions, the global test is often the tighter one; see global cash flow.
What kind of revenue it is
Lenders read consulting revenue by how likely it is to recur. The same total can come from very different books of business.
| Revenue type | How it is earned | How a lender reads it |
|---|---|---|
| Outsourced or fractional HR | Monthly retainer from each client | Closest to recurring revenue; the lender asks for client count, tenure and cancellations |
| Project consulting | Fixed fee or hourly: compensation studies, handbooks, investigations, reorganizations | Lumpy; the lender wants a record of replacing finished projects with new ones |
| Benefits consulting | Advisory fees, or commissions paid by carriers | Commission income is read more like an insurance agency book, with renewal history |
| Training and assessments | Per program or per participant | Depends on employer training budgets, which are cut first in a slowdown |
Beyond the mix, the underwriter asks for revenue by client for the last full year and the year to date. A firm that earns a large share of revenue from one employer is exposed to that employer's next reorganization, merger or new HR director. The lender will also read the client agreements: a retainer that either side can end on short notice is recurring only as long as the client is happy.
The last question is people. Consultants carry the relationships. A lender wants to know who the key consultants are, how long they have stayed, and whether they have signed non-solicitation agreements; a senior consultant who leaves with three clients changes the cash flow the loan was sized on. Commission-based benefits practices raise the parallel question for producers; compare SBA loans for insurance agencies.
Buying an HR consulting firm
Only 4 loans financed a change of ownership, 3.1% of the trade's total against 10.4% nationally, but their median was $1,080,950 at a median rate of 8.63%. The lower rate is a size effect: SBA caps variable rates at the base rate plus 3% above $350,000, against plus 6% from $50,001 to $250,000, so the large acquisition loans sit under a tighter cap than the small working-capital loans that dominate the trade.
Almost all of the price is goodwill, so the lender's question is how much of the client list stays after the seller leaves. Three SBA rules shape the structure. First, SBA prohibits an earnout to the seller, which is the tool consulting deals often use elsewhere to share the retention risk; see earnout vs seller note. Second, a seller note can count for up to half of the buyer's minimum 10% equity injection only if it is on full standby for the life of the loan; a note that is paid currently is debt and counts in debt service. Third, the seller cannot stay as an owner, officer or employee, though the seller may consult for up to 12 months, or up to 24 months under SOP 50 10 8.1 from 1 October 2026.
A purchase of this size needs an independent business valuation, since the amount financed, less appraised real estate and equipment, exceeds $250,000, and the loan cannot exceed it. From 1 October 2026 every change of ownership also needs financial due diligence and must show 1.25x debt service coverage on historical results, and an acquisition of $3 million or more excluding real estate needs a quality of earnings report. For a buyer, the practical diligence is client-level: revenue by client for three years, which clients are tied to the seller personally, and which contracts require consent to assign. See financing a consulting firm acquisition.
In a consulting acquisition the lender underwrites the client list after the seller leaves, not before.
Why so few start-ups, and one large 504 loan
Start-ups took 6.2% of loans and franchises none. An HR consultancy is cheap to start, so founders rarely need to borrow for it, and a lender has little to lend against until there are clients. A consultant leaving a larger firm should also check any non-compete or non-solicitation terms before counting former clients in a projection; a lender will ask.
The single 504 loan, $5,386,000, is one project, not a trend. SBA 504 finances owner-occupied real estate and long-life equipment, 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. For most consulting firms leasing remains the norm; see SBA 7(a) vs 504.
Preparing the file
The SBA checklist comes first: 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 an HR consultancy, add:
- Revenue by client for the last full year and year to date, marked retainer or project
- Copies of the largest client agreements, with term and cancellation provisions
- A receivables aging by client
- A list of consultants with tenure, and the non-solicitation agreements they have signed
- For benefits practices, commission statements by carrier
- A use-of-proceeds narrative: who the loan will hire, and what they will bill
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 SBA lenders in its book, where 278 write SBA 7(a) and 504. On SBA loans the lender pays Transparent, not the borrower.
Common questions
- Can an HR consulting firm get an SBA loan with no collateral?
- Yes, though no collateral does not mean no security. Every owner of 20% or more guarantees the loan personally, and on larger loans the lender will take a lien on personal real estate where there is equity. What approves the loan is cash flow and the quality of the client list.
- Why do so many HR consulting loans go through SBA Express?
- The loans are small and the needs are simple: working capital, hiring and systems. SBA Express goes up to $500,000 and is decided on the lender's own process; 48.1% of the trade's loans used it.
- Can I buy an HR consulting firm with an earnout?
- Not with an SBA loan. SBA prohibits an earnout to the seller in a change of ownership it finances. Buyers use a seller note instead, which counts toward the equity injection only if it is on full standby for the life of the loan.
- How big are SBA loans to buy HR consulting firms?
- There were only 4 in the period, with a median of $1,080,950 at a median rate of 8.63%. At that size the purchase needs an independent business valuation, and from 1 October 2026 financial due diligence and 1.25x coverage on historical results.
- Does recurring retainer revenue help my application?
- Yes. Retainer revenue from long-standing clients is the closest thing a consultancy has to collateral. Show it by client, with tenure and cancellation terms, separately from project work.