SBA loans for tile and terrazzo contractors: mostly Express, with a long tail of large loans

What the figures say, and what the median hides

Tile and terrazzo contractors (NAICS 238340) set ceramic, porcelain and stone tile, marble and mosaic, and pour and grind terrazzo floors, indoors and out. The typical firm is small: the median SBA loan in the industry supported 3 jobs. But the loan figures describe two quite different populations sharing one code.

A median that matches the national one suggests an ordinary industry. The spread says otherwise. The bottom quarter of loans is small enough to be equipment and a working-capital buffer, and the top tenth runs to $1 million and beyond. Very few loans went to start-ups, which tells you what lenders want to see first: a crew that has already been paid for its work, for several years, on returns that show it.

Two trades under one code

A residential tile setter works kitchens, baths, showers and backsplashes, usually for homeowners directly or as a sub to remodelers and builders. A commercial tile and terrazzo contractor bids on schools, airports, hospitals, retail and office lobbies, with crews trained to pour, cure, grind and polish a floor that has to last decades. Terrazzo work in particular calls for specialized grinding and polishing equipment and skilled labor that is hard to replace.

The residential setter tends to be the SBA Express borrower. The commercial contractor is more often behind the large requests, and its file needs to answer questions a residential setter never gets asked. For the wider trade, see SBA loans for flooring contractors and SBA loans for masonry contractors, which share much of the same customer base.

Express, the rate caps and the fixed-rate share

SBA Express loans go up to $500,000 with a 50% guaranty, and the lender approves them under its own credit process. That suits a setter borrowing for two trucks and a wet saw, and 60% of loans in this industry went that way. The trade-off is that the lender carries half the risk rather than the quarter or less it carries on a standard 7(a), where SBA guarantees 85% of loans of $150,000 or less and 75% above. Express lenders therefore lean on personal credit, clean filed returns and time in business. See SBA 7(a) vs SBA Express.

Size also sets the ceiling on rate. SBA caps variable 7(a) rates at the base rate plus 6.5% for loans of $50,000 or less, plus 6% from $50,001 to $250,000, plus 4.5% from $250,001 to $350,000, and plus 3% above $350,000. A quarter of tile loans were $46,500 or less, inside the widest cap, and the middle half of rates reaches 12%, a higher upper end than on the industry's larger loans. The acquisition loans, far larger, priced at a median of 9.75%. See the SBA maximum interest rate.

The fixed-rate share, 18.3%, is worth noticing. A contractor whose margin depends on the bid it made months ago has good reason to want a payment that does not move with the base rate, and some lenders will fix the rate on a smaller loan. The trade-off is covered in fixed vs variable business loans.

Margins, callbacks and the payment chain

A tile contractor's credit is decided less by the trade than by who pays it, how quickly, and how often it goes back to fix a finished job.

Tile is labor-heavy and material-sensitive. Porcelain, natural stone, setting materials and waterproofing membranes are a large share of job cost, and a contractor that prices a job before the stone arrives can lose its margin on one price change. Lenders read gross margin over two or three years; a steady margin says the owner prices and estimates well, a falling one says the business is buying volume.

Callbacks are the tile-specific risk. A failed shower pan or a cracked floor comes back months later as unbilled rework, and it shows up in the books as a job that lost money after it was closed. A lender who sees a pattern of write-offs or warranty costs will ask about it, so the file should explain any that exist.

On commercial work the question is the payment chain. A terrazzo contractor is paid by the general contractor, who is paid by the owner, and retainage is often held until the whole building is finished. A contractor with most of its revenue from two or three general contractors is effectively financing their schedules, and a lender will want revenue by customer and an aging that shows retainage separately. See customer concentration and debt. Where the need is to carry payroll between billing and payment, a revolving line often fits better than a term loan: see lines of credit for contractors.

Contractors who bridged those gaps with merchant cash advances need to deal with them first. SBA will not refinance an active advance, and 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.

Buying a tile or terrazzo contractor

Thirteen loans, 7.2% of the total, financed a change of ownership, below the national 10.4%. The median was $496,400, more than three times the industry's median loan, at a median rate of 9.75%. What a buyer is paying for is rarely equipment: it is the estimator, the lead setters or terrazzo mechanics, and the general contractors who invite the firm to bid. Those are exactly the things that can leave with the seller.

Lenders therefore look hard at the buyer. A buyer who has run tile or flooring crews reads very differently from a financial buyer with no trade background; see buyer industry experience requirements. The SBA rules are the same as in any change of ownership: equity of at least 10% of total project costs; 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 seller notes and SBA's standby rule.

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. In a trade where the seller's name gets the bid invitation, that longer transition is useful. From the same date, a change of ownership must show 1.25x debt service coverage on historical results, and financial due diligence is required on every one.

Owning the shop: SBA 504

Nineteen tile and terrazzo contractors used SBA 504, at a median of $544,000, most likely for a shop, a yard or a warehouse where stone slabs, tile inventory and terrazzo equipment are kept. A 504 loan is typically 50% from a bank, 40% from the CDC and 10% from the borrower, and the business must occupy at least 51% of an existing building. For a contractor paying rent on a shop it expects to use for many years, it can be the cheaper long-term route; see SBA 7(a) vs 504.

Preparing the file

The standard SBA 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, and personal tax returns and a personal financial statement for each owner of 20% or more, each of whom personally guarantees the loan. Cash flow is tested against SBA's minimum of 1.15x debt service coverage, and 1.0x globally once the owners' personal obligations are included. For a tile or terrazzo contractor, add:

• Revenue by customer for the last full year, split between homeowners, remodelers, builders and general contractors
• An accounts receivable aging with retainage shown on its own line
• Gross margin by job for the largest jobs, with material and labor separated
• Any warranty or callback costs, and how they were resolved
• A list of signed but unstarted work, for commercial contractors
• Quotes for grinders, trucks or shop build-out being financed

Transparent builds the lender package — financing model, lender presentation, blind teaser and underwriting memo — in a day once the documents are in, 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.