SBA lenders approved 569 7(a) loans to interior design firms from October 2023 to June 2026, about $156 million from 127 lenders. The median loan was $150,000 and the median rate 10.5%, a quarter point above the national median, with the top quarter of loans at 12% or more. SBA Express made up 40.8% of approvals. Acquisitions were only 5.4% of loans, about half the national 10.4%. Lenders underwrite the firm's own fees rather than furniture and materials it passes through to clients, treat client deposits as owed, and weigh the owner's personal finances heavily.
| Measure | Interior Design Services | All industries |
|---|---|---|
| SBA 7(a) loans approved | 569 | 162,355 |
| Median loan | $150,000 | $150,300 |
| Middle half of loans | $50,000 – $300,000 | $50,000 – $500,000 |
| Loans of $1 million or more | 5.6% | 12.9% |
| Median rate at approval | 10.5% | 10.25% |
| Middle half of rates | 9.75% – 12% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 31 (5.4%) | 16,849 (10.4%) |
| Median acquisition loan | $725,000 | $693,000 |
| Lenders that made these loans | 127 | 1,648 |
| SBA 504 loans (real estate, equipment) | 42 | 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
- 569 (Oct 2023 – Jun 2026)
- Median loan
- $150,000 (middle half $50,000 to $300,000)
- Median rate at approval
- 10.5% (middle half 9.75% to 12%)
- SBA Express share
- 40.8%
- Acquisitions
- 31 loans (5.4%), median $725,000
- SBA 504 loans
- 42, median $427,000
Small loans, and why their rates run higher
Interior design services (NAICS 541410) took 569 SBA 7(a) loans worth $155,953,300 from FY2024 through June 2026. The loans are small: a median of $150,000, the middle half between $50,000 and $300,000, and a 90th percentile of $534,800. Only 32 loans (5.6%) reached $1 million. The median loan supported two jobs. This is an industry of owner-led studios, and 40.8% of approvals went through SBA Express, which runs up to $500,000 on the lender's own credit process with a 50% guaranty.
Rates ran high for the size: the middle half went from 9.75% to 12%, so a quarter of loans priced at 12% or more. Much of that is loan size. SBA caps variable 7(a) rates by size, and this industry's loans sit squarely in the bands where the cap is widest.
| Loan size | SBA's variable-rate cap | Where design firms fall |
|---|---|---|
| $50,000 or less | Base rate plus 6.5% | The bottom quarter of the industry's loans: equipment, software, a first working-capital line |
| $50,001 to $250,000 | Base rate plus 6% | The median loan and most Express loans |
| $250,001 to $350,000 | Base rate plus 4.5% | The top of the middle half: a larger studio or refinancing |
| Above $350,000 | Base rate plus 3% | Acquisitions, which priced at a median of 9.5%, and studio real estate |
The cap is a ceiling, not a price. Lenders price below it where the credit supports it, and a firm with clean returns and a strong owner can do better than the median. See SBA maximum interest rates, SBA loan rates and SBA 7(a) vs SBA Express.
Gross billings are not the revenue a lender relies on
Many design firms buy furniture, fixtures, fabric and materials for clients and bill them through, sometimes with a markup. That makes revenue look large and margins look thin. Lenders separate the two: design fees, whether hourly, flat or a share of the project, are the firm's own work; procurement is money passing through, with a margin on top. A firm whose revenue doubles because one client bought a houseful of furniture has not doubled its earning power, and the lender will say so.
Client deposits matter as much. A deposit taken to order furniture is owed to the client until the goods arrive; it is a liability, not cash the firm can spend. Lenders look for deposits on the balance sheet as a liability and check that the cash is there to meet them. A firm that uses this year's deposits to pay last year's orders is borrowing from its clients, and lenders read that as a firm short of working capital.
Show design fees and procurement on separate lines. A lender that has to guess the split will assume the less favorable one.
Books kept on a cash basis can also swing with the timing of large orders. Lenders test coverage on filed returns, at least 1.15x under SBA rules, and a year distorted by a big procurement or a delayed payment needs explaining. See accrual vs cash basis and debt service coverage ratio.
The designer is the credit
In a studio where the owner wins the work, leads the design and manages the client, the lender is lending to that person as much as to the company. It shows in how the file is read.
- Global cash flow. SBA requires coverage of at least 1.0x once the owners' personal income and obligations are included. With a small firm, the owner's mortgage and personal debts can decide the loan. See global cash flow.
- Personal guarantee. Every owner of 20% or more personally guarantees an SBA loan. See personal guarantees.
- Collateral. A design firm has little: computers, samples, perhaps a vehicle. Where business collateral falls short, SBA lenders commonly look to the owners' personal real estate. See personal residence as SBA collateral.
- Depth behind the owner. Senior designers or project managers who run clients on their own make a firm more lendable, and far easier to sell.
Why so few design firms are bought with SBA loans
Only 31 of the industry's loans (5.4%) financed a change of ownership, about half the national 10.4%. The reason is the one above: when clients follow the designer, a buyer is paying for relationships that may not stay. SBA limits the seller's transition in a complete change of ownership to consulting for up to 12 months, or up to 24 months under SOP 50 10 8.1 from 1 October 2026, and prohibits an earnout that would tie price to how many clients remain.
The acquisitions that do get financed are larger, at a median of $725,000 and a median rate of 9.5%. Lenders are most comfortable where the firm has a team, a name that is not only the founder's, and repeat commercial or hospitality clients. Lenders ask how the buyer's background fits, and a designer or design-firm manager reads differently from an investor new to the field. Where the amount financed, less appraised real estate and equipment, exceeds $250,000, an independent business valuation is required. The buyer injects at least 10% of total project costs, and from 1 October 2026 a change of ownership must show 1.25x on historical results. See buyer industry experience and SBA seller transition.
Projects, cycles and concentration
Design work follows home sales, renovation budgets and commercial fit-outs, and it arrives as projects. Lenders want to see the pipeline behind the next year: signed agreements, deposits received, and the mix between residential clients and commercial ones such as offices, hotels and restaurants. One large commercial client can carry a year and leave a gap the next; lenders ask for revenue by client to see it.
Firms that buy a studio or showroom use SBA 504 as well: 42 loans at a median of $427,000. 504 finances owner-occupied real estate, typically 50% from a bank, 40% from the CDC and 10% from the borrower, with the firm occupying at least 51% of an existing building. See SBA 7(a) vs 504.
Preparing a design firm's file
SBA's list: 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, and personal tax returns and a personal financial statement for each owner of 20% or more. The owner's resume supports SBA Form 1919's management questions. For a design firm, add revenue split between design fees and procurement, a schedule of client deposits held, revenue by client for the last two or three years, and the signed projects for the year ahead.
Transparent builds that file into a full lender package — financing model, lender presentation, blind teaser and underwriting memo — in a day, for the 278 lenders in its book that write SBA 7(a) and 504. On SBA loans the lender pays Transparent, not the borrower. See the package, and for neighboring fields, other specialized design services, architectural services and graphic design services.
Common questions
- Why was my design firm offered a higher rate than the national median?
- Mostly loan size. SBA's rate caps are widest on small loans, the base rate plus 6.5% at $50,000 or less and plus 6% up to $250,000, and most design-firm loans fall there. A strong file can price below the cap.
- Do lenders count furniture we resell to clients as revenue?
- They count it, but they do not rely on it the way they rely on design fees. Lenders separate procurement from fee income and underwrite the firm's margin, not its gross billings.
- Can a design firm with few assets get an SBA loan?
- Yes. SBA lends on cash flow, and a shortfall in business collateral does not by itself decline a loan. Lenders will commonly look to the owners' personal real estate and require guarantees from every owner of 20% or more.
- Can I buy an interior design firm with an SBA loan?
- Yes, though it is uncommon: 5.4% of the industry's loans. Lenders want a firm whose clients are not tied only to the seller, a buyer with relevant experience, and a transition plan that fits SBA's consulting limit.