SBA loans for landscape architecture firms

An established-firm industry

Landscape architectural services (NAICS 541320) covers firms that plan and design outdoor spaces: parks, campuses, streetscapes, residential developments and private estates. From FY2024 through June 2026 they took 215 SBA 7(a) loans worth $72,693,000, from 80 lenders. The median loan was $150,000, the middle half ran from $50,000 to $303,500, the 90th percentile was $784,000, and 17 loans, 7.9%, reached $1 million.

Two figures stand out. Start-ups took 2.3% of loans and franchises 0.9%, so SBA lending here goes almost entirely to firms with a track record. And SBA Express carried 43.7% of loans, more than two in five. A design practice's needs are usually modest and specific: working capital, software and equipment, an office, a partner buyout. Express, which goes up to $500,000 with a 50% guaranty and runs on the lender's own credit process, fits that.

The rate is the other thing to notice: a median of 10.75%, with a quarter of loans at 11.99% or more. Small loans carry wider SBA caps — the base rate plus 6.5% at $50,000 or less and plus 6% from $50,001 to $250,000 — and on an Express loan the lender keeps half the risk, against a quarter or less on a standard 7(a). Both tend to push pricing up. A firm borrowing more than $150,000 for a purchase or a refinance should compare a standard 7(a), where SBA guarantees 75% above $150,000. See SBA 7(a) vs SBA Express and SBA loan rates.

Design fees or installation work

The first thing a lender establishes is how the firm makes its money. A pure design practice earns fees for plans, drawings and construction administration. Some firms in this code also build what they design, and when installation is a large share of revenue the lender treats them more like a landscaping contractor. The two are underwritten differently.

Many firms sit somewhere between. The cleanest file shows revenue split between fees and installation for each of the last two to three years, so the lender can underwrite each part on its own terms.

Backlog, clients and the construction cycle

A landscape architect's work arrives through development: residential subdivisions, commercial projects, institutional campuses and public works. When development slows, new commissions slow with it, often after a lag while existing projects finish. Lenders look at the signed backlog, the pipeline of proposals, and how revenue is spread across private developers, public agencies and homeowners.

• Public-sector clients pay reliably but slowly, and their contracts may be re-bid. A receivables aging by client shows how slowly.
• Developer clients bring larger commissions but concentrate risk. One developer holding a large share of fees is a common reason a lender marks a file down. See customer concentration and debt.
• Residential clients are diverse and pay faster, but the work is more discretionary.
• Professional liability insurance and any open claims come up in every file.

A firm whose receivables are large relative to revenue may be better served by a working capital line against them than by term debt. See lines of credit for engineering firms, which are underwritten on the same principles.

Buying or succeeding to a practice

Changes of ownership were 21 loans, 9.8% of the industry's lending and close to the national 10.4%, at a median of $567,000 and 10.25%. Many design-firm transactions are successions: a founding principal retiring and selling to a senior employee or an outside licensed buyer. The value is in relationships, reputation and staff, so the purchase is almost all goodwill.

• The buyer's license and experience matter. Landscape architecture is a state-licensed profession, and a lender will ask who will hold the license and stamp the drawings after closing. See buyer industry experience.
• In a complete change of ownership the seller may not stay as an owner, officer or employee, and may consult for up to 12 months, or up to 24 months under SOP 50 10 8.1 from 1 October 2026. A principal who wants to phase out over several years may fit a partial change of ownership better.
• Where the amount financed, less appraised real estate and equipment, exceeds $250,000, SBA requires an independent business valuation, and the purchase loan cannot exceed it.
• The buyer injects at least 10% of total project costs. A seller note counts for up to half of that only on full standby for the life of the SBA loan; SBA prohibits an earnout.
• From 1 October 2026, every change of ownership needs financial due diligence and must show debt service coverage of 1.25x on historical results.

For the wider picture see buying a business from a retiring owner and the closest neighbor, SBA loans for architectural firms.

Preparing the file

The SBA list: 2–3 years of business tax returns, 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, each of whom personally guarantees the loan. The owner's resume supports SBA Form 1919.

Add the items a design firm is judged on: revenue by client and by type of client, the signed backlog, a receivables aging by client, a split between fee and installation revenue if the firm builds, the staff roster with licenses, and the professional liability policy. For a purchase, add the target's latest full year of figures and the letter of intent. Transparent builds the file into a full lender package — financing model, lender presentation, blind teaser and underwriting memo — in a day once the documents are in, and matches it to lenders among the 278 in its book that write SBA 7(a) and 504. On SBA loans the lender pays Transparent, not the borrower. See the package.