SBA loans for home remodeling contractors

What lenders check

Each lender sets its own checklist. SBA sets the basic eligibility tests.

A lender reviewing a loan to home remodeling contractors looks at the business's numbers and these items for the trade:

• Contractor license and lead-safe renovator certification for work in older homes
• Customer deposits against work completed, so the lender can see whether the company bills ahead of or behind its costs
• Backlog of signed jobs against crew capacity, since a remodeler with more sold work than crews cannot finish projects on time

Common uses of the money

Businesses like these use SBA loans for:

• A design studio or showroom where homeowners choose finishes
• Job trucks, a tile saw package and a material trailer for a second kitchen and bath crew
• Cabinets, windows and fixtures ordered on a large kitchen or bath job before the next homeowner payment

Collateral

Remodelers own little beyond work trucks, trailers and tool packages, so any owned shop or showroom building matters a great deal.

How much they borrow

95% of these loans were $500,000 or less, the range where SBA Express is available.

The median loan was $100,000, smaller than the $150,300 median for all SBA 7(a) loans. Half of the loans fell between $40,000 and $200,000. The most common size band was $50,000 or less.

By business age, 71% had operated for more than 2 years and 14.5% for 2 years or less. 11% were startups opening with the loan, and 3.0% paid for a change of ownership.

How the money comes

59% of the loans went through SBA Express and 49% were lines of credit. The median term was 10 years.

Across all industries, 36% of loans went through SBA Express and 28% were lines of credit. Express counts here include Export Express.

The median term was 10 years (120 months). For working capital, SBA's maximum term is 10 years. For equipment, it is 10 years, or up to 15 years if the IRS asset class useful life supports it. Source: SOP 50 10 8.1: App. 17, Para. A.1 (p. 390); App. 17, Para. A.2 (p. 390).

Where the loans are

California had the most loans, 367 of 3,771 (9.7%).

Location is the state of the business, not of the lender.

These states have their own page for this industry, with at least 50 loans from October 1, 2019 to June 30, 2026.

• New Jersey336 loans
• Pennsylvania334 loans
• Michigan317 loans
• Washington264 loans
• Colorado197 loans
• Oregon175 loans
• North Carolina159 loans
• Minnesota158 loans
• Georgia148 loans
• Maryland135 loans
• Connecticut131 loans
• Virginia112 loans
• Arizona104 loans
• Wisconsin103 loans
• Missouri93 loans
• Tennessee91 loans
• New Hampshire86 loans
• South Carolina83 loans
• Kentucky58 loans
• Iowa50 loans
• Kansas50 loans

Compare every state on SBA loans by state.

How often these loans went bad

7.7% of 2,089 seasoned loans were charged off, above the 3.6% rate for all SBA 7(a) loans.

161 of the 2,089 loans approved October 1, 2019 to September 30, 2022 were charged offcharged offThe lender wrote the loan off as a loss because it was not being repaid. by June 30, 2026. By dollars, 3.5% of the approved amount was charged off.

SBA size standard

NAICS 236118 has its own size standard.

For NAICS 236118, SBA's size standard is $45 million in average annual receipts. A business at or under the standard is small for SBA's purposes. To qualify, a business must fit the size standard for the applicant's primary industry in 13 CFR 121.201, measured in annual receipts or employees. SBA measures size on the date the application is accepted for SBA processing, or for delegated loans the date the lender approves the loan.

A business over the standard can still qualify under the alternative standard: tangible net worth of $20 million or less and average net income after federal income taxes of $6.5 million or less over the prior two fiscal years. Source: SOP 50 10 8.1: Sec. A, Ch. 1, Para. D.1 (p. 14); Sec. A, Ch. 1, Para. D.2 (p. 14); 13 CFR § 121.301(b)(2).