SBA lenders approved 154 7(a) loans to siding contractors (NAICS 238170) from October 2023 through June 2026, $40,168,200 from 45 lenders. The median loan was $100,000, below the national $150,300, and 58.4% were SBA Express loans. The median rate at approval was 10.5% against 10.25% nationally. Acquisitions were 6.5% of loans, but the ten that closed were large, at a median of $749,500 and 8.75%. Because a siding company owns little beyond trucks, trailers and tools, lenders underwrite cash flow: the mix of retail, insurance and builder work, crew costs, and margins that survive material price changes.
| Measure | Siding Contractors | All industries |
|---|---|---|
| SBA 7(a) loans approved | 154 | 162,355 |
| Median loan | $100,000 | $150,300 |
| Middle half of loans | $35,500 – $245,875 | $50,000 – $500,000 |
| Loans of $1 million or more | 5.2% | 12.9% |
| Median rate at approval | 10.5% | 10.25% |
| Middle half of rates | 9.99% – 12.25% | 9.3% – 11.25% |
| Acquisitions (change of ownership) | 10 (6.5%) | 16,849 (10.4%) |
| Median acquisition loan | $749,500 | $693,000 |
| Lenders that made these loans | 45 | 1,648 |
| SBA 504 loans (real estate, equipment) | — | 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
- 154 (Oct 2023 – Jun 2026), from 45 lenders
- Median loan
- $100,000 (national $150,300)
- Median rate at approval
- 10.5% (national 10.25%)
- SBA Express share
- 58.4% of loans
- Acquisitions
- 10 loans (6.5%), median $749,500 at 8.75%
- SBA 504
- None in the period
The figures: a small-loan industry with a thin top end
Siding contractors install and repair vinyl, fiber cement, wood, metal and engineered siding, with the soffit, fascia and trim that go with it. The SBA data for NAICS 238170 describes small, owner-run installers borrowing modest amounts, with a handful of larger companies at the top.
| Figure | Siding contractors | What it tells a borrower |
|---|---|---|
| Loans / total / lenders | 154 / $40,168,200 / 45 | A small field: most lenders made only a few of these loans |
| Median loan | $100,000 | Two-thirds of the national median of $150,300 |
| Middle half of loans | $35,500 to $245,875 | Trucks, trailers, working capital and small refinancings |
| 90th percentile | $500,000 | Exactly the SBA Express ceiling |
| Loans of $1 million or more | 8 (5.2%) | Acquisitions and the few larger exterior firms |
| Median rate (middle half) | 10.5% (9.99% to 12.25%) | A quarter point above the national 10.25%, with a wide upper tail |
| Fixed-rate share | 13% | Almost nine in ten loans float with the base rate |
| Start-ups / franchises | 10.4% / 8.4% | A real franchise presence for a trade business |
| Median jobs supported | 3 | An owner and a small crew, with installers often outside payroll |
| SBA 504 | None | Siding firms rarely buy their own buildings |
Two readings matter. First, the 90th percentile lands exactly on $500,000, the SBA Express maximum, which is consistent with larger borrowers taking the biggest Express loan available rather than a standard 7(a). Second, the rate distribution leans high, with the upper quarter of loans at 12.25% or more. That follows from loan size. SBA lets lenders charge more on small loans: the variable-rate cap is the base rate plus 6.5% at $50,000 or less and plus 6% from $50,001 to $250,000, against plus 3% above $350,000. A book of small loans prices toward the higher caps. See SBA loan rates and the SBA maximum interest rate.
Where the work comes from decides how a lender reads it
A siding company's revenue comes from three sources that behave differently, and most lenders will ask for the split before they look at anything else. The same revenue number means different things depending on the mix.
| Source of work | How the money arrives | What the lender worries about |
|---|---|---|
| Retail replacement for homeowners | Deposit at signing, balance at completion, sometimes through a consumer financing program that pays the contractor directly | Lead cost, sales staff turnover, cancellations, and whether the owner is the only closer |
| Storm and insurance restoration | Paid in stages as the homeowner's insurer releases funds, with a holdback until the work is certified complete | Revenue that spikes after hail or wind and then falls away; receivables waiting on insurers |
| New construction for home builders | Invoiced to the builder on terms, sometimes with retainage | A few builders making up most of revenue, slow pay, and exposure to housing starts |
Retail work is the most bankable when it is diversified and the company, not just the owner, generates the leads. A lender will look at how much is spent on marketing per job and whether sales have held up when a salesperson left. Customer deposits sit on the balance sheet as a liability until the job is done; a company that spends deposits to finish older jobs is financing itself with customers' money, and the balance sheet shows it.
Storm work is treated the way lenders treat any windfall. A year lifted by a hailstorm is not a run rate, and a lender underwriting debt service will average across several years or discount the storm year. See lending on run-rate EBITDA and, if the storm year has passed, refinancing after a down year.
Builder work brings volume and predictability while housing is strong, and concentration when it is not. If one builder is a large share of revenue, expect the lender to ask for its payment history and to test cash flow without it. See customer concentration and debt.
Bring revenue split by retail, insurance and builder work for each of the last three years. It answers the lender's first question before it is asked.
Crews, materials and the winter months
The median siding borrower supported 3 jobs, which understates the labor in the business. Many siding companies install through subcontracted crews paid by the square or by the job, and those crews do not appear on payroll. Lenders ask three things about that model.
- Can the crews walk? A good installation crew is the scarcest asset in the trade. If the company's capacity is two crews who also work for competitors, a lender sees revenue that can move with them.
- Is the classification defensible? Treating installers as independent contractors lowers payroll cost, but a state audit that reclassifies them brings back taxes, workers' compensation premiums and penalties. Lenders read the certificates of insurance the company collects from its subs and ask how the arrangement works in practice.
- Who carries the warranty? Siding manufacturers warrant the product; the contractor warrants the workmanship. Callbacks for poor installation come out of margin, and a lender may ask how many there were.
Material is the other large cost. Vinyl, fiber cement and trim are bought from distributors, usually on trade credit, and a price increase between signing a contract and installing it comes out of the contractor's margin. A lender will read the accounts payable aging to see whether the company pays its supplier on terms or is stretching it to fund jobs, because a stretched supplier is a lender the bank cannot see.
Then there is the season. In cold climates exterior work slows sharply in winter while loan payments do not. SBA requires debt service coverage of at least 1.15x, and 1.0x globally once the owners' personal income and debts are included, and lenders test it on full-year results, so a contractor that earns its year in seven months needs cash or a line to carry the other five. A working capital line sized to that gap is often worth more than a larger term loan. See seasonal lines of credit and SBA CAPLines.
Licensing and compliance lenders check
Siding work on homes is regulated in ways that a lender verifies before closing, because a lapsed license can stop revenue overnight.
- Contractor licensing or registration. Many states and cities require a home improvement or residential contractor license. The lender wants it in the company's name, or in the name of the owner who qualifies it, and current.
- Lead-safe work on older homes. Removing siding on homes built before 1978 disturbs lead paint, and federal rules require firm certification and trained renovators for that work. A company that does it without certification carries fines and liability a lender will not ignore.
- Insurance. General liability and workers' compensation, and proof the company requires the same of its subcontractors. Ladder and scaffold work makes claims history a real underwriting item.
Buying a siding company
Only 10 of the 154 loans, 6.5%, financed a change of ownership, below the national share of 10.4%. But they were large: a median of $749,500 at a median rate of 8.75%. Larger loans carry lower SBA rate caps, which is consistent with the lower median rate; it does not mean purchases get lighter scrutiny.
Most of what a buyer pays for in a siding company is goodwill: the name, the lead flow, the builder relationships and the crews' willingness to keep working for a new owner. At the purchase sizes above, the amount financed, less appraised real estate and equipment, will usually exceed $250,000, and then SBA requires an independent business valuation, and the loan for the purchase cannot exceed it. Trucks and trailers reduce the goodwill figure only if they are appraised. See the SBA business valuation requirement and financing goodwill.
- The buyer injects at least 10% of total project costs. A seller note counts toward up to half of that only if it is on full standby, no principal or interest, for the life of the SBA loan.
- SBA prohibits an earnout to the seller, which matters in a business where price is often argued over next year's storm season.
- The seller may consult for up to 12 months, or up to 24 months under SOP 50 10 8.1 from 1 October 2026, but cannot stay on as an owner, officer or employee. If the seller is the company's best salesperson, the lender will ask who closes jobs after the transition.
- From 1 October 2026 a change of ownership must show 1.25x debt service coverage on historical results, with financial due diligence on every purchase and a quality of earnings report at $3 million or more excluding real estate.
Lenders also look at the buyer. SBA Form 1919 asks for management experience, and a buyer from outside construction should show sales or operations experience and a plan for keeping the crew leads. See buyer industry experience requirements, and for comparable trades, financing a roofing company acquisition and financing a remodeling company acquisition.
Preparing a siding contractor's file
Start from the SBA checklist: 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 any notes being refinanced, and personal tax returns and a personal financial statement for every owner of 20% or more, each of whom personally guarantees the loan. An owner resume supports the Form 1919 management questions. For a siding company, add:
- Revenue by source (retail, insurance, builder) for each year, and the largest customers by revenue
- A current job list with contract values, deposits taken and expected completion
- Accounts receivable and payable agings, including amounts waiting on insurers
- The crew list: employees or subcontractors, how each is paid, and their insurance certificates
- Contractor license, lead-safe firm certification and insurance declarations
- A list of trucks, trailers and equipment with lienholders
Small contractors often bridge a slow season with merchant cash advances. SBA will not refinance an active advance, and from 1 October 2026 one 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 and MCA refinance. Refinancing other debt with a 7(a) loan requires the new payment to be at least 10% lower and the debt current for the last 12 months.
Once the documents are in, Transparent builds the 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. For the choice between the two SBA lanes, see SBA 7(a) vs SBA Express.
Common questions
- Why are SBA loans to siding contractors so small?
- Because most siding companies are small installers borrowing for trucks, trailers and working capital. The median loan was $100,000 against $150,300 nationally, and the middle half ran from $35,500 to $245,875. The few large loans were mostly acquisitions.
- Should a siding contractor use SBA Express?
- It depends on the size and purpose. SBA Express covers loans up to $500,000 with a 50% guaranty, and 58.4% of siding loans used it. A larger loan or a purchase usually goes through a standard 7(a), where SBA guarantees 85% of loans of $150,000 or less and 75% above that.
- Do lenders count insurance restoration revenue?
- They count it, but they rarely treat a storm year as normal. Expect the lender to average several years or discount the peak, and to look at receivables still waiting on insurers.
- Is using subcontracted installers a problem for an SBA loan?
- Not in itself. Lenders want to see that the arrangement is documented, that subcontractors carry their own insurance, and that the company's capacity does not depend on crews who could leave for a competitor.
- What collateral does a siding company offer?
- Usually trucks, trailers and tools, which cover only a small part of a loan. SBA does not decline a loan for a collateral shortfall alone, but lenders will take what business assets exist and often a lien on the owner's home where there is equity.