From October 2023 to June 2026, 58 lenders approved 175 SBA 7(a) loans to jewelry, watch, precious stone and precious metal wholesalers, $78,107,600 in total. The median loan was $150,000, level with the national $150,300, but the median rate was 11%, well above the national 10.25%. Acquisitions were rare, 4% of loans against 10.4% nationally, yet large: a median of $2,537,100. Lenders lend cautiously against gems and metal, so these loans are decided on trading margins, customer receivables, inventory controls and whether profit comes from the trade rather than from price moves.
| Measure | Jewelry, Watch, Precious Stone, and Precious Metal Merchant Wholesalers | All industries |
|---|---|---|
| SBA 7(a) loans approved | 175 | 162,355 |
| Median loan | $150,000 | $150,300 |
| Middle half of loans | $69,050 – $350,000 | $50,000 – $500,000 |
| Loans of $1 million or more | 10.3% | 12.9% |
| Median rate at approval | 11% | 10.25% |
| Middle half of rates | 9.87% – 12.25% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 7 (4%) | 16,849 (10.4%) |
| Median acquisition loan | $2,537,100 | $693,000 |
| Lenders that made these loans | 58 | 1,648 |
| SBA 504 loans (real estate, equipment) | 5 | 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
- 175 from 58 lenders (Oct 2023 – Jun 2026)
- Median loan
- $150,000 (national $150,300)
- Median rate at approval
- 11% (national 10.25%)
- Acquisitions
- 7 loans (4%), median $2,537,100
- Fixed-rate share
- 6.3% of loans
- SBA Express share
- 28.6% of loans
The figures: an ordinary loan size, at a higher price
This industry (NAICS 423940) covers wholesalers and distributors of finished jewelry and watches, loose diamonds and colored stones, and gold, silver and platinum products sold to the trade: manufacturers, retailers and other dealers. The businesses that borrow under SBA are small, with a median of 3 jobs supported, and carry inventory worth many times their payroll.
| Measure | Figure | Why it looks that way |
|---|---|---|
| Median loan | $150,000 (national $150,300) | A typical working-capital or equipment request |
| Middle half of loans | $69,050 to $350,000 | A quarter of loans were $69,050 or less |
| Loans of $1 million or more | 18 (10.3%); 90th percentile $971,200 | Where acquisitions and inventory-heavy houses fall |
| Median rate | 11% (middle half 9.87% to 12.25%) | Well above the national 10.25%, and a wide band |
| Fixed-rate share | 6.3% | Almost every loan floats with the base rate |
| SBA Express share | 28.6% | Most loans went through full 7(a) underwriting |
| Acquisitions | 7 loans (4%), median $2,537,100 at 9% | Rare, and among the largest SBA loans in the industry |
| SBA 504 | 5 loans, median $248,000 | Few of these firms buy their premises |
| Start-ups / franchises | 2.3% / none | Lenders fund established houses with trade history |
Why the rate runs high
The median rate of 11% cannot be explained by small loans alone. The median size matches the national one, only 28.6% of loans used SBA Express, and SBA's rate caps — the base rate plus 6.5% for loans of $50,000 or less, plus 6% from $50,001 to $250,000, plus 4.5% from $250,001 to $350,000 and plus 3% above $350,000 — leave room for a lender to price toward the top of the band when it sees more risk. The middle half of rates here reaches 12.25%.
What lenders see is a balance sheet dominated by assets that are portable, hard to appraise and, in part, owned by someone else. A lender cannot easily take and sell a vault of loose stones, and a guaranty only covers part of its loss. So it charges more, and it leans harder on the cash flow and on the owners' personal guarantees, which every owner of 20% or more gives. For how the rate caps work see the SBA maximum interest rate.
A jewelry wholesaler's inventory can be worth more than the loan it is asking for and still count for very little as collateral.
Inventory: what lenders will and will not lend against
Lenders who finance inventory typically advance up to 85% of net orderly liquidation value, or roughly half of cost, and only on goods they can identify, count and sell. In this trade, that excludes a good deal of what sits in the safe.
| Asset | How a lender usually treats it |
|---|---|
| Owned finished jewelry and watches | Lendable, at a discount to liquidation value, if tracked on a perpetual inventory and counted |
| Owned loose diamonds and colored stones | Lendable only with credible grading and valuation; many lenders avoid them |
| Gold, silver and platinum stock | Valued at market less a cushion; price swings reduce what a lender will count |
| Goods held on memo from suppliers | Not the borrower's property, so not collateral at all |
| Goods out on memo with retailers | Still owned, but out of the borrower's control; lenders heavily discount or exclude them |
| Receivables from retailers | Typically advanced at 80% to 90% if current; over 90 days past invoice usually ineligible |
Memo is the issue lenders raise first. Much of the trade moves on consignment, and a lender must be able to separate what the business owns from what it merely holds. A perpetual inventory that tags each piece as owned or memo, reconciled to regular physical counts, is what makes any of it financeable. Customer concentration also caps what a lender will count: borrowing bases commonly limit any single customer to 20% to 25% of eligible receivables, and a wholesaler selling mostly to a few retail chains will feel that. See inventory advance rates, how a borrowing base works and concentration limits.
Trade, not speculation: compliance and controls
SBA treats speculative businesses as ineligible, so a precious metal wholesaler has to show that it earns a trading margin on goods it buys and resells, not a return on holding metal. The lender makes that eligibility call from the books, and will want to see that the margin, not the movement of gold prices, drives the results. A written policy on how the business limits its exposure to metal prices, and results that hold steady through price swings, answer that question.
Dealers in precious metals, stones and jewels above certain volumes must run anti-money-laundering programs under federal law, and a lender will ask whether the business has one and follows it. Cash sales, customer identification and suspicious-activity procedures all come up.
Physical controls are part of the credit. Lenders ask about insurance that covers inventory in the vault, in transit and out on memo, about the safe and alarm arrangements, and about how often inventory is counted and by whom. A loss that is uninsured is a loss the lender shares.
Seven acquisitions, at a median above $2.5 million
Only seven loans, 4% of the total, financed a change of ownership, but their median was $2,537,100 at a median rate of 9%, far larger than the rest of the industry's lending. These are purchases of established houses, and at that size the SBA's limits come into view: 7(a) loans go up to $5 million, with SBA's guaranty to one borrower capped at $3.75 million. See acquisitions above the SBA limit.
The largest question in these deals is the inventory. How it is counted and valued at closing, how much of it is memo, and what level of working capital the buyer is entitled to receive all move the price. See the working capital peg. From 1 October 2026, financial due diligence is required on every SBA change of ownership, and a quality of earnings report on acquisitions of $3 million or more excluding real estate; in this trade, that review will test inventory and gross margin closely.
The usual rules apply: equity of at least 10% of total project costs; a seller note counting toward up to half of it only on full standby for the life of the loan; no earnout to the seller; and, at these sizes, an independent business valuation that the purchase loan cannot exceed. The seller may consult for up to 12 months, or up to 24 months under SOP 50 10 8.1 from 1 October 2026, which matters in a trade built on personal supplier and customer relationships.
SBA term loan or an asset-based line?
Many jewelry wholesalers need revolving money that rises and falls with the season's buying, not a ten-year term loan. Where receivables are current and inventory is well controlled, an asset-based line can fit better. Transparent's book holds 235 lenders that write asset-based loans and lines, and 278 that write SBA 7(a) and 504, so the choice can be made on the business's needs. See lines of credit for wholesale distributors.
Preparing the file
Start with the SBA 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 with copies of notes being refinanced, and personal tax returns and a personal financial statement for each owner of 20% or more. For a jewelry wholesaler, add:
- An inventory report by category, separating owned goods from memo goods held and memo goods out
- The most recent physical count and how it reconciled to the books
- An accounts receivable aging by customer, with days outstanding
- Copies of the main memo and consignment agreements
- The anti-money-laundering program and the inventory insurance policy
- For metal dealers, how the business manages price exposure
Cash flow is tested against SBA's minimum of 1.15x debt service coverage, and 1.0x globally including the owners. Transparent builds the lender package — financing model, lender presentation, blind teaser and underwriting memo — in a day once the documents are in. On SBA loans the lender pays Transparent, not the borrower.
Common questions
- Why was my SBA rate quoted higher than the national median?
- The industry median was 11% against 10.25% nationally, with the middle half running to 12.25%. Lenders see collateral that is portable and hard to value, and they price for it within SBA's caps. Strong controls and steady margins are the best argument for a lower rate.
- Can I borrow against goods I hold on memo?
- No. Memo goods belong to the supplier, so they are not your collateral. Goods you have sent out on memo are still yours, but lenders heavily discount or exclude them because they are out of your control.
- Is a precious metals dealer eligible for an SBA loan?
- It can be, if it earns its profit as a trader buying and reselling goods. SBA treats speculative businesses as ineligible, so the lender will look at whether results depend on the trading margin or on metal prices.
- Can an SBA loan finance buying a jewelry wholesaler?
- Yes, though it is uncommon: seven loans in the period, at a median of $2,537,100 and 9%. Larger deals approach the $5 million 7(a) limit, and the inventory count and valuation at closing will be central to both price and loan.