SBA loans for pet care businesses: grooming, boarding and daycare

What SBA lenders approved for pet care

Pet care services (NAICS 812910: grooming, boarding, dog daycare, training and pet sitting, excluding veterinary practices) took 1,500 SBA 7(a) loans from FY2024 through June 2026, worth $717,379,900, from 274 lenders. The median loan was $225,000, half again the national median of $150,300. The spread was wide: the middle half ran from $51,925 to $546,525, and the top tenth started at $1,200,000. At the low end are mobile groomers and small shops; at the top, purpose-built boarding and daycare facilities, some with the land under them. 194 loans (12.9%) were $1 million or more.

The median rate at approval of 10% sits just under the national 10.25%, with the middle half between 9% and 11%. For purchases, the median rate was 9%, reflecting the larger loan sizes that SBA's lower rate caps apply to.

Not all pet care earns the same way

The category covers businesses with very different revenue. A lender reading a pet care file starts by working out which one it is looking at, because that decides what to test.

Most facilities combine several of these, and the mix is itself a strength: grooming and daycare fill the weeks that boarding does not. Prepaid packages deserve care. Cash taken for services not yet delivered is a liability on the balance sheet, and a lender or a buyer will treat it as one.

Financing a new facility

With 36.1% of loans going to start-ups, more than a third of pet care files have no operating history. SBA requires an equity injection of at least 10% of total project costs for a start-up, and every owner of 20% or more personally guarantees the loan. The rest of the decision rests on four things.

• The owner. Experience managing animal care, grooming or a service business with staff. Lenders read the resume behind Form 1919 closely when there is no history to read instead.
• The site. Zoning that permits boarding or daycare, a landlord willing to accept animals, space for outdoor runs, and neighbors who will not object to noise. A lease with enough term, counting options, to repay the build-out.
• The build-out. Drainage, washable surfaces, ventilation, sound control, kennels and fencing. These improvements are expensive and suit few other tenants, so lenders treat them as weak collateral and want a budget with a contingency in it.
• The franchise, if any. 26.9% of pet care loans went to franchises. Lenders look at the system's record with other units, its fees, and its support for new owners.

The projection should show how quickly daycare enrollment and boarding occupancy build, and carry enough working capital to pay staff and rent until they do. See buyer industry experience requirements, which applies to new owners as much as to buyers.

For a new pet care facility, the lender's question is less whether the market wants it than whether the owner's equity lasts until it is full.

Buying an existing pet care business

Purchases were 175 loans at a median of $575,000 and 9%. An established facility with clients, staff and permits in place avoids the start-up risk. SBA's change-of-ownership rules apply: at least 10% of total project costs as equity, a seller note counting toward half of it only on full standby for the life of the loan, and no earnout. 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 helps where clients know the owner by name.

Lenders look at client retention, staff tenure (especially groomers and trainers who hold relationships), any incidents involving animals and how they were handled, and whether the permits and the lease transfer to the buyer. Where the amount financed, less appraised real estate and equipment, exceeds $250,000, SBA requires an independent business valuation. From 1 October 2026 a change of ownership must show 1.25x debt service coverage on historical results; a facility with cash flow of 1,250 against annual payments of 1,000 meets it. See financing a pet care business acquisition and, for franchised units, franchise resale financing.

Owning the building

Because a boarding or daycare facility is so specialized, many owners would rather own it than depend on a landlord. SBA 504 financed 115 pet care projects in the period, at a median of $500,000. 504 is typically 50% from a bank, 40% from a CDC and 10% from the borrower, rising to 15% for a new business or special-purpose property and 20% for both; a purpose-built kennel may be treated as special-purpose. The business must occupy at least 51% of an existing building, or 60% of new construction. A 7(a) can also finance real estate over up to 25 years. See SBA 7(a) vs SBA 504.

Preparing a pet care file

The SBA list: 2–3 years of business tax returns where the business exists, 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, with the owner's resume for Form 1919. A start-up adds a business plan with a use-of-proceeds narrative.

Add reports from the booking software: revenue by service by month, boarding occupancy, daycare enrollment, and prepaid packages outstanding. Include the lease or site plan, the zoning approval or permit, contractor quotes for the build-out, insurance, and the franchise agreement if there is one. 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 takes it to the lenders in its book that write SBA 7(a) and 504, 278 of them. On SBA loans the lender pays Transparent, not the borrower.