SBA lenders approved 3,771 7(a) loans to residential remodelers between October 2023 and June 2026, about $749 million from 258 lenders. The typical loan is small: a median of $100,000, with the middle half between $40,000 and $200,000, and 59.1% went through SBA Express. The median rate was 10.75%, above the national 10.25%. Acquisitions are rare, at 3% of loans against 10.4% nationally, but large, at a median of $633,650. Lenders decide on filed tax returns, how customer deposits are handled, and how much of the business depends on the owner.
| Measure | Residential Remodelers | All industries |
|---|---|---|
| SBA 7(a) loans approved | 3,771 | 162,355 |
| Median loan | $100,000 | $150,300 |
| Middle half of loans | $40,000 – $200,000 | $50,000 – $500,000 |
| Loans of $1 million or more | 2.9% | 12.9% |
| Median rate at approval | 10.75% | 10.25% |
| Middle half of rates | 10% – 12.24% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 114 (3%) | 16,849 (10.4%) |
| Median acquisition loan | $633,650 | $693,000 |
| Lenders that made these loans | 258 | 1,648 |
| SBA 504 loans (real estate, equipment) | 82 | 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
- 3,771 (Oct 2023 – Jun 2026)
- Median loan
- $100,000 (national $150,300)
- Median rate at approval
- 10.75% (national 10.25%)
- SBA Express share
- 59.1% of loans
- Acquisitions
- 114 loans (3%), median $633,650
- Median jobs supported
- 2
An industry of small loans to small crews
Residential remodelers (NAICS 236118) are general contractors who renovate, add on to and repair existing homes: kitchens and baths, additions, basements, whole-house renovations. From FY2024 through June 2026, SBA lenders approved 3,771 7(a) loans to them, worth $749,406,700, from 258 lenders. The median loan supported 2 jobs, which describes the typical borrower well: an owner who sells and runs the jobs, perhaps one employee, and subcontracted trades for the rest.
| Figure | Residential remodelers | What it says |
|---|---|---|
| Median loan | $100,000 | About two-thirds of the national $150,300: working capital, a truck, equipment |
| Middle half of loans | $40,000 to $200,000 | A quarter of loans were $40,000 or less |
| 90th percentile | $353,500 | Even large remodeler loans are modest by SBA standards |
| Loans of $1 million or more | 111 (2.9%) | Mostly acquisitions and real estate |
| Median rate | 10.75% (middle half 10% to 12.24%) | Above the national 10.25%, as small loans usually are |
| Fixed-rate share | 11.3% | Almost all loans float |
| SBA Express | 59.1% of loans | Most loans are decided on the lender's own credit process |
| Start-ups | 11.1% of loans | Lenders prefer a remodeler with a track record |
| Acquisitions | 114 loans (3%), median $633,650 at 9.63% | Rare, and priced below the industry median |
| SBA 504 | 82 loans, median $557,000 | Showrooms, shops and yards |
Why most of these loans go through SBA Express
SBA Express loans go up to $500,000 with a 50% guaranty, and the lender makes the credit decision with its own process and paperwork. For a request of 100,000 to buy a truck and carry payroll between draws, that is usually the practical route, and 59.1% of remodeler loans took it. The trade-off is that a half guaranty leaves the lender with more of the risk than on a standard 7(a), which carries 85% on loans of $150,000 or less and 75% above. Lenders compensate with tighter credit boxes: personal credit, time in business and clean tax returns carry a lot of weight. See SBA 7(a) vs SBA Express.
Loan size also explains the rate. 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; the cap drops to plus 4.5% from $250,001 to $350,000 and plus 3% above $350,000. The industry median of $100,000 sits in the plus-6% tier and at least a quarter of loans sit in the plus-6.5% tier, which is part of why the median rate of 10.75% is above the national one, and why the acquisition loans, far above $350,000 at the median, priced lower at 9.63%. See SBA maximum interest rate.
What an underwriter looks for in a remodeler's books
A remodeler's financial statements are shaped by jobs, not by a steady sales cycle, and a lender reads them for a few specific things.
- Customer deposits. Remodelers usually collect a deposit before starting and draws as the job progresses. That cash belongs to jobs not yet finished; on an accrual balance sheet it is a liability. Lenders look for a business that is not using this year's deposits to finish last year's jobs. A bank balance that looks healthy but is mostly unearned deposits is not liquidity.
- How revenue is recognized. Many small remodelers keep cash-basis books, so a large deposit collected in December can make one year look strong and the next weak. An underwriter will ask about year-end timing if revenue swings. See cash versus accrual financials.
- Gross margin by job. Material cost overruns and change orders that were never billed are where remodelers lose money. A lender who sees margins fall while sales rise will ask why.
- Subcontractors and insurance. With few employees, most labor is subcontracted. Lenders ask whether subs carry their own insurance and are properly treated as contractors, because a reclassification or an uninsured injury lands on the borrower.
- Licensing. Many states license home-improvement contractors, and the license often sits with the owner personally. The lender will want to see it current and in good standing.
Cash flow is then tested the usual way: SBA requires debt service coverage of at least 1.15x, and 1.0x globally once the owners' personal debts are included. In a business this small, the global test often decides the loan, because the owner's mortgage and car payments are set against one household's income. See global cash flow.
Unearned customer deposits are the remodeler's most misread balance: to a lender they are money owed in work, not money in the bank.
Why remodelers are rarely bought, and why those loans are large
Only 114 loans, 3% of the industry's total, financed a change of ownership, against 10.4% nationally. The median was $633,650, more than six times the industry's median loan, at a median rate of 9.63%. Both figures follow from the same fact: most remodeling businesses are their owners. The phone rings because of the owner's name and referrals, the owner sells and estimates the jobs, and the license is personal. A business like that is hard to sell and harder to finance, because a lender cannot count on the cash flow surviving the owner's departure.
The remodelers that are bought with SBA loans tend to be the exceptions: firms with a sales process that does not run through the owner, project managers who run jobs, a marketing engine that generates leads, and often a showroom. They are larger, which is why the loans are. The standard SBA acquisition rules apply: at least 10% equity for a complete change of ownership; 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 an independent business valuation where the amount financed, less appraised real estate and equipment, exceeds $250,000. See financing a remodeling company acquisition.
The seller's transition matters more here than in most trades. In a complete change of ownership the seller may not stay as an owner, officer or employee but may consult for up to 12 months, extended to up to 24 months under SOP 50 10 8.1 from 1 October 2026. For a remodeler whose referral network lives in the seller's phone, that consulting period is how the relationships move. From the same date, a change of ownership must show 1.25x coverage on historical results, and financial due diligence is required on every one. See SBA seller transition.
Preparing a remodeler's SBA file
Start from SBA's standard 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 remodeler, add:
- A list of jobs in progress, with contract value, amount billed, deposits held and cost to complete
- The contractor license and certificates of general liability and workers' compensation insurance
- An explanation of any year where revenue jumped or fell, tied to specific large jobs
- For equipment or vehicle purchases, quotes for what is being bought
- The owner's resume, which supports Form 1919's management experience
Remodelers that have bridged slow months with merchant cash advances need to deal with them before an SBA lender will. SBA will not refinance an active advance; from 1 October 2026 an advance becomes eligible only once converted to a term loan that has amortized for at least 24 months with no new advance since. See refinancing cash advances for contractors. For working capital between draws, a line may fit better than a term loan; see lines of credit for general contractors.
Transparent builds the 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. Only 258 lenders approved a remodeler loan in the period, so matching the file to lenders that know the trade is much of the work. On SBA loans the lender pays Transparent, not the borrower.
Common questions
- What is a typical SBA loan for a remodeling contractor?
- Small. The median 7(a) loan to residential remodelers from October 2023 to June 2026 was $100,000, the middle half ran from $40,000 to $200,000, and 59.1% of loans were SBA Express. Only 2.9% were $1 million or more.
- Why is the rate on my remodeling loan higher than the SBA average?
- Mostly because the loan is small. The industry's median rate was 10.75% against 10.25% nationally, and SBA allows higher maximum rates on smaller loans: base plus 6.5% up to $50,000 and base plus 6% from $50,001 to $250,000, against base plus 3% above $350,000.
- Do customer deposits count as cash when a lender reviews my business?
- Not as free cash. Deposits pay for work you still owe, so lenders treat them as a liability and look at whether current deposits are funding the completion of older jobs. A schedule of jobs in progress with deposits held answers the question before it is asked.
- Can I buy a remodeling company with an SBA loan?
- Yes, though it is less common than in most industries: 114 loans, 3% of the total, at a median of $633,650. Lenders favor businesses that generate leads and run jobs without the owner. Expect the standard rules: at least 10% equity, a seller note counting toward equity only on full standby for the life of the loan, and no earnout.
- Does a remodeler need to own real estate to get an SBA loan?
- No. Most remodeler loans are made without business real estate as collateral, because there is none. SBA does not decline a loan solely for weak collateral, but the lender must take what is available, which for a small contractor can include a lien on the owner's home.