Security guard and patrol companies took 223 SBA 7(a) loans from October 2023 to June 2026, about $69 million from 71 lenders, at a median of $150,000 and a median rate of 10.75%, against $150,300 and 10.25% nationally. Nearly half were SBA Express, and the median loan supported 20 jobs: this is a payroll business. Lenders underwrite the contract book — term, cancellation, re-bid dates and concentration — along with licensing and insurance. Purchases were rare, 4% of loans, but large, at a median of $1,226,700. For the gap between weekly payroll and client payments, a receivables line often fits better than a term loan.
| Measure | Security Guards and Patrol Services | All industries |
|---|---|---|
| SBA 7(a) loans approved | 223 | 162,355 |
| Median loan | $150,000 | $150,300 |
| Middle half of loans | $71,650 – $350,000 | $50,000 – $500,000 |
| Loans of $1 million or more | 7.6% | 12.9% |
| Median rate at approval | 10.75% | 10.25% |
| Middle half of rates | 10% – 12% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 9 (4%) | 16,849 (10.4%) |
| Median acquisition loan | $1,226,700 | $693,000 |
| Lenders that made these loans | 71 | 1,648 |
| SBA 504 loans (real estate, equipment) | 7 | 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
- 223 from 71 lenders (Oct 2023 – Jun 2026)
- Median loan
- $150,000 (national $150,300)
- Median rate at approval
- 10.75% (national 10.25%)
- SBA Express
- 46.6% of loans
- Acquisitions
- 9 loans (4%), median $1,226,700
- Median jobs supported
- 20 per loan
A payroll business with small loans
Security guards and patrol services (NAICS 561612) covers companies that post unarmed and armed officers at buildings, sites, events and campuses, and that run mobile patrols. From FY2024 through June 2026 they took 223 SBA 7(a) loans worth $69,218,400 from 71 lenders. The median loan was $150,000, the middle half ran from $71,650 to $350,000, and the 90th percentile was $500,000, exactly the SBA Express ceiling. Seventeen loans, 7.6%, reached $1 million.
The figure that stands out is jobs: the median loan supported 20. A guard company's biggest cost by far is wages, and its equipment — radios, a few patrol vehicles, uniforms, perhaps scheduling software — is worth little. That combination produces the lending pattern: modest loans, a high share on Express, and very little collateral behind them.
| Figure | Security guard companies | What it tells you |
|---|---|---|
| Median loan | $150,000 | Level with the national $150,300 |
| Middle half of loans | $71,650 to $350,000 | Working capital, vehicles, refinancing |
| 90th percentile | $500,000 | The SBA Express ceiling |
| Median rate at approval | 10.75% (middle half 10% to 12%) | Half a point over the national 10.25% |
| Fixed-rate share | 7.2% | More than nine in ten loans float |
| SBA Express | 46.6% of loans | Nearly half go through the lender's own credit process |
| Acquisitions | 9 loans (4%), median $1,226,700 at 9.5% | Well under the national 10.4%, but large |
| Start-ups | 4.5% of loans | New guard companies seldom start on SBA money |
| SBA 504 | 7 projects, median $230,000 | Few guard companies own property |
Why the rate is higher, and why Express dominates
The median rate of 10.75% sits half a point above the national 10.25%, and the middle half ran up to 12%. Three things push it up. The median loan, $150,000, falls in the band where SBA lets a variable rate run to the base rate plus 6%, against plus 3% above $350,000. Nearly half are Express loans, which carry a 50% guaranty against 85% or 75% on a standard 7(a), so the lender keeps more of the risk. And with little collateral, the lender is pricing a cash-flow loan to a thin-margin business. See SBA maximum interest rates and SBA 7(a) vs SBA Express.
The contract book is the credit
A lender reading a guard company works through its contracts site by site. Revenue is billed by the hour, margins are thin, and a contract lost at re-bid takes its officers' hours with it. Contract features decide the file more than the headline revenue.
| Contract feature | How the lender reads it |
|---|---|
| Term and cancellation | Many guard contracts can be cancelled on short notice; long relationships and multi-year terms carry more weight |
| Re-bid calendar | When each large contract is next bid, and the company's record of keeping contracts at re-bid |
| Concentration | One property manager, campus or agency holding a large share of hours is the most common concern |
| Wage pass-through | Contracts that let the bill rate rise with minimum wage or prevailing wage protect the margin |
| Armed vs unarmed posts | Armed work pays more but raises insurance cost and licensing requirements |
| Government work | Steady payers, but slow, and paid on bid cycles with their own rules on assignment |
Around the contracts sit the compliance items. Guard companies and their officers are licensed at the state level in most of the country, and armed officers carry additional permits. General liability and workers' compensation insurance are large costs, and a claims history that is getting worse is a warning. Overtime, meal breaks and how officers are classified are frequent sources of wage claims; a company that pays long-term officers as independent contractors carries a liability the lender will size before it lends, or decline over. See customer concentration and debt.
In a business where payroll is most of the cost, unpaid payroll taxes are the first thing a lender checks; bring them current before applying.
The payroll gap: term loan or line of credit
Officers are paid weekly or every two weeks; commercial clients pay on invoice terms of a month or more, and government clients often later. A company that wins a large new post has to carry weeks of payroll before the first payment arrives, and the faster it grows the bigger that gap gets. A term loan funds that once. A line of credit secured by receivables grows with the business.
Asset-based lenders typically advance 80% to 90% of eligible receivables, treat invoices more than 90 days past invoice date as ineligible, and commonly cap any single customer at 20% to 25% of eligible receivables — a cap that bites hard in a business with one or two dominant clients. Many guard companies instead use factoring, and when they grow out of it, move to a line. See lines of credit for security guard companies, moving from factoring to a line and SBA CAPLines.
SBA will not refinance an active merchant cash advance or a factoring agreement. 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. Other debt can be refinanced with a 7(a) if the new payment is at least 10% lower and the debt has been current for the last 12 months. See refinancing cash advances for security companies.
Few purchases, but large ones
Only 9 loans, 4% of the total, financed purchases of guard companies, against 10.4% nationally. But their median was $1,226,700 at 9.5%, eight times the industry's median loan. Nine loans is a small sample, but the size points to established companies with a contract book large enough to survive a lost re-bid rather than small operations. Lenders are wary of a buyer new to the industry, because retention at re-bid depends on relationships and operations the buyer has to run from day one. See buyer experience requirements.
- Contracts that need client consent to assign must be dealt with before closing; in an asset purchase, many will. See change-of-control consents.
- In many states a guard company's license does not transfer with a sale, and the buyer needs its own license or qualifying manager in place by closing.
- At least 10% of total project costs as equity; a seller note counts toward half of it only on full standby for the life of the SBA loan. SBA prohibits an earnout, so retention risk cannot be pushed onto the price.
- The purchase is almost all goodwill. SBA requires an independent business valuation where the amount financed, less appraised real estate and equipment, exceeds $250,000, and the loan cannot exceed it.
- From 1 October 2026 a change of ownership must show 1.25x debt service coverage on historical results, needs financial due diligence, and needs a quality of earnings report if the acquisition is $3 million or more excluding real estate.
- The seller may not stay on as an owner, officer or employee, but may consult for up to 12 months, or up to 24 months under SOP 50 10 8.1 from 1 October 2026, which is the window to introduce the buyer to every major client before re-bid.
Preparing a guard company's 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, with the owner's resume for Form 1919. For a line of credit, add an AR aging by customer with days outstanding, an AP aging and the existing liens.
Specific to guard companies: a contract schedule with each site, client, hours, bill rate, term, cancellation notice and next re-bid; payroll registers and proof that payroll taxes are current; state licenses; insurance declarations and loss runs. 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 can take it to the 278 lenders in its book that write SBA 7(a) and 504 or the 235 that write asset-based loans and lines. On SBA loans the lender pays Transparent, not the borrower. See the package and how we underwrite.
Common questions
- Can a security guard company get an SBA loan without much collateral?
- Yes. SBA does not let a lender decline a loan solely because collateral falls short, though the lender takes what is available and every owner of 20% or more personally guarantees the loan. The decision rests on the contract book and cash flow.
- What rate do guard companies pay on SBA loans?
- The median rate at approval from October 2023 to June 2026 was 10.75%, with the middle half from 10% to 12%, against a national median of 10.25%. The few acquisition loans had a median of 9.5%.
- Should I use SBA or a line of credit to fund payroll for a new contract?
- For a recurring gap between payroll and client payments, a receivables line usually fits better, because it grows with billings. A term loan suits a one-time need such as vehicles, a refinance or a purchase.
- Can I refinance factoring with an SBA loan?
- Not while the factoring agreement is active; SBA will not refinance one. Companies usually move from factoring to a bank or asset-based line first, then consider SBA for term debt.
- How big are SBA loans to buy a guard company?
- Only 9 purchases were financed in the period, at a median of $1,226,700. Lenders favor buyers who have run guard operations, and client consents and licensing need to be settled before closing.