SBA lenders approved 189 7(a) loans to other specialized design services, the code for fashion, clothing, jewelry, textile and shoe designers, between October 2023 and June 2026: $57,720,000 from 66 lenders. The median loan was $150,000, level with the national $150,300, at a median rate of 10.75% against 10.25% nationally. With few hard assets, lenders decide on cash flow, how dependent the firm is on its founder and a few clients, and, for firms that also sell product, on inventory and production risk.
| Measure | Other Specialized Design Services | All industries |
|---|---|---|
| SBA 7(a) loans approved | 189 | 162,355 |
| Median loan | $150,000 | $150,300 |
| Middle half of loans | $60,000 – $282,000 | $50,000 – $500,000 |
| Loans of $1 million or more | 6.3% | 12.9% |
| Median rate at approval | 10.75% | 10.25% |
| Middle half of rates | 9.8% – 12% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 9 (4.8%) | 16,849 (10.4%) |
| Median acquisition loan | $905,000 | $693,000 |
| Lenders that made these loans | 66 | 1,648 |
| SBA 504 loans (real estate, equipment) | 11 | 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
- 189 (Oct 2023 – Jun 2026)
- Lenders that approved one
- 66
- Median loan
- $150,000
- Median rate at approval
- 10.75% (national 10.25%)
- Acquisitions
- 9 loans, median $905,000 at 10%
- Median jobs supported
- 2
Who is in this code, and what they borrowed
NAICS 541490 is the catch-all for design work that has no code of its own. Architecture, engineering, interior, industrial, graphic and computer systems design are all classed elsewhere: see interior design and graphic design. What remains is mainly fashion and clothing design, costume design, and jewelry, textile and shoe design. Some of these firms sell only design time. Others design and sell their own products, which makes them part studio and part consumer brand.
From FY2024 through June 2026 the code took 189 SBA 7(a) loans worth $57,720,000 from 66 lenders. The median business supported 2 jobs, which says most borrowers are a founder and perhaps one employee. The middle half of loans ran from $60,000 to $282,000, the top tenth began at $818,000, and 12 loans (6.3%) reached $1 million or more.
| Figure | Specialized design | How to read it |
|---|---|---|
| Median loan | $150,000 | Level with the national $150,300 |
| Middle half of loans | $60,000 to $282,000 | Working capital, equipment and refinancing for small studios |
| Top tenth | $818,000 and up | Acquisitions and firms that make and sell their own lines |
| Median rate | 10.75% (middle half 9.8% to 12%) | Half a point above the national 10.25% |
| Fixed-rate share | 9% | Almost all loans float |
| Acquisitions | 9 loans (4.8%), median $905,000 at 10% | Less than half the national 10.4% share |
| Start-ups | 9% of loans | Most borrowers already have clients |
| SBA Express | 34.9% of loans | Small needs on the lender's own credit process |
| SBA 504 | 11 loans, median $556,000 | Studios, workshops and small production space |
Lending when the asset is talent
A fashion or jewelry design studio owns computers, software licenses, pattern-making and sample tools, and perhaps a lease. None of that repays a loan in a liquidation. The firm's design rights and portfolio have value, but lenders seldom lend against intellectual property in a business this size. So the lender underwrites three things: cash flow, the people who produce it, and the owners' personal support.
- Cash flow. SBA requires debt service coverage of at least 1.15x, and conventional banks commonly look for 1.25x. A studio with cash available for debt service of 125 against annual payments of 100 covers 1.25x. See debt service coverage ratio.
- Owner dependence. If the founder is the design lead, the rainmaker and the account manager, the lender will ask what happens if the founder is out for six months. It may require key person life insurance.
- Guarantees. Every owner of 20% or more personally guarantees an SBA loan, and where business collateral falls short, lenders may take personal assets as well.
In a design firm, the lender is really underwriting the founder; a file that shows depth beyond one person answers its biggest worry.
How design revenue is earned, and how lenders read it
The way a firm charges changes how a lender sees its revenue. Many firms mix several of these.
| Revenue model | How a lender reads it | What it wants to see |
|---|---|---|
| Project fees | Lumpy; a good year can be followed by a thin one | Three years of results, the pipeline, and win rates with repeat clients |
| Monthly retainers | Steadier and easier to lend against | Retainer agreements, their terms and how often they renew |
| Royalties and licensing | Recurring but tied to someone else's sales | Licensing contracts, royalty statements and the licensees' concentration |
| Own product sales | A consumer or wholesale business with inventory and production risk | Gross margin by product, inventory aging, and customer and retailer concentration |
Client concentration is a common problem. A textile or apparel design firm doing most of its work for two brands or retailers has a strong client list and a fragile business at the same time. Lenders want revenue by client for each year, and an honest account of how long the main relationships have lasted. See how customer concentration affects borrowing.
Firms that sell their own products face a second set of questions. Inventory typically advances at up to 85% of net orderly liquidation value, or roughly half of cost, and seasonal apparel can be worth less than that once its season has passed. Jewelry is the exception in part: the metal and stones keep a market value, though the design premium on top of them does not. For firms carrying stock, a working capital line may fit better than term debt. See inventory advance rates.
Rates, loan size and SBA Express
The median rate was 10.75%, with the middle half from 9.8% to 12%, and only 9% of loans carried a fixed rate. Small loans explain most of the premium: SBA caps variable 7(a) rates at the base rate plus 6.5% for loans of $50,000 or less and plus 6% from $50,001 to $250,000, against plus 3% above $350,000, and lenders price small, largely unsecured service loans close to the cap. SBA Express carried 34.9% of loans; it goes up to $500,000 with a 50% guaranty. See SBA 7(a) vs SBA Express and SBA loan rates.
Buying a design firm
Only 9 loans (4.8%) financed a change of ownership, less than half the national 10.4% share, at a median of $905,000 and a median rate of 10%. Design firms are hard to sell for the reason they are hard to lend to: clients follow people. A buyer, and the buyer's lender, needs a credible plan for keeping the clients and the designers once the founder has gone.
SBA's rules shape that plan. In a complete change of ownership the seller may not stay on as an owner, officer or employee, but may consult for up to 12 months after closing. Under SOP 50 10 8.1, from 1 October 2026, that rises to up to 24 months, which helps in a business built on personal relationships. SBA also prohibits an earnout to the seller, a tool buyers of creative firms often reach for; the alternative is a fixed seller note, which counts toward up to half of the 10% minimum equity injection only on full standby for the life of the SBA loan. See earnout vs seller note.
- Where the amount financed, less appraised real estate and equipment, exceeds $250,000, SBA requires an independent business valuation, and the loan for the purchase cannot exceed it. In a design firm almost the whole price is goodwill. See financing goodwill.
- From 1 October 2026 every change of ownership needs financial due diligence and must show 1.25x debt service coverage on historical results.
- Lenders weigh the buyer's own design or industry experience heavily. See buyer experience requirements.
- Lenders need the target's latest full year of figures, never an older year, and the letter of intent.
Studios and the file
SBA 504 financed 11 projects in the code, at a median of $556,000: studios, workshops and small production spaces the firms occupy. 504 typically splits a project 50% from a bank, 40% from a certified development company and 10% from the borrower, and requires the borrower to occupy at least 51% of an existing building. See SBA 7(a) vs SBA 504.
For the 7(a) file, SBA's standard list applies: 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, personal tax returns and a personal financial statement for each owner of 20% or more, and optionally bank statements, a use-of-proceeds narrative and the owner's resume. Add revenue by client for each year, current retainer and licensing agreements, a receivables aging, and a short note on who does the work besides the founder.
Transparent builds that into a full lender package — financing model, lender presentation, blind teaser and underwriting memo — in a day, and takes it to 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 how we underwrite.
Common questions
- Can a design studio with no real assets get an SBA loan?
- Yes. SBA lenders underwrite cash flow and the owners' guarantees, not just collateral. The studio needs filed returns that show cash flow covering the payments, and each owner of 20% or more guarantees the loan.
- Does it hurt that most of our revenue comes from two clients?
- It is a common concern with design firms. It does not rule out a loan, but the lender will want revenue by client for each year and evidence that the main relationships are long-standing.
- Can I buy a design firm with an earnout?
- Not with SBA financing: SBA prohibits an earnout to the seller in a change of ownership it finances. A fixed seller note and a consulting period for the seller, up to 12 months, or 24 months from 1 October 2026, are the usual substitutes.
- Will a lender lend against our designs or licensing income?
- Lenders seldom take design rights as collateral in a business this size. Royalty and licensing income does count as revenue, and lenders will want the contracts and royalty statements behind it.
- What rate do specialized design firms pay on SBA loans?
- The median rate at approval was 10.75%, against 10.25% nationally, with the middle half between 9.8% and 12%. Acquisition loans had a median rate of 10%.