Everyone can agree that SBA loans are not easy to get. You need to have good credit and a profitable business or business idea, and you must be willing to put in the time and paperwork needed to obtain an SBA loan. So, when all is said and done, who gets SBA loan? The following tables show which types of businesses are the SBA get most and least successful loans and, more importantly, pay them back on time. The rankings are based on the 06 data to 2015 that we receive directly from the Small Business Administration (SBA).
The following explains what you can learn from the data and how you can improve your chances of getting approved an SBA loans ,
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Top 10 ways companies by number of SBA Loans
Ranking | Type In the | # SBA 7a loans from 06 to 2015 | volume of SBA 7a loans 06-2015 | loan size (# by volume) | % of loans are Repaid |
|---|---|---|---|---|---|
1 | Full service Restaurants | 22384 | $5,899,951,231 | $263,579 | 53.99 % |
2 | Limited service Restaurants | 16577 | $3,948,264,568 | $238,177 | 53.49 % |
3 | Dentist Offices | 10883 | $4,853,110,585 | $445,935 | 63.27 % |
4 | Beauty Salons | 9317 | $1,038,667,426 | $111,481 | 55.29 % |
5 | Doctor Offices (except Mental Health Specialists) | 8758 | $2,962,850,742 | $338,302 | 67.06 % |
6 | Specialty trade Contractors | 8660 | $1,552,975,593 | $179,327 | 58.27 % |
7 | General Automotive Repair | 8417 | $1,654,40,979 | $196,565 | 51.96 % |
8 | Gas Stations with Convenience Stores | 8195 | $5,935,935,507 | $724,336 | 45.69 % |
9 | Landscaping Services | 8133 | $975,03,633 | $119,993 | 62.10 % |
10 | General Freight Trucking, Local | 7288 | $774,031,128 | $106,206 | 55.66 % |
Top 10 types of companies by volume of SBA Funding
Ranking | Type In the | volume of 7a SBA financing Received 06-2015 | Average loan size (# Divided by Volume) |
|---|---|---|---|
1 | Hotels (Except Casino Hotels) and Motels | $9,791,800,061 | $1,480,60 |
2 | Gas Stations with Convenience Stores | $5,935,935,507 | $724,336 |
3 | Full-Service Restaurants | $5,899,951,231 | $263,579 |
4 | Dentist Offices | $4,853,110,585 | $445,935 |
5 | Limited-Service Restaurants | $3,948,264,568 | $238,177 |
6 | Child Day Care Services | $3,151,765,078 | $458,439 |
7 | Veterinary Services | $3,121,984,318 | $670,673 |
8 | Doctor Offices (except Mental Health Specialists) | $2,962,850,742 | $338,302 |
9 | Beer, Wine and spirits Stores | $2,326,337,236 | $366,064 |
10 | Broilers and other meat processing Businesses | $2,101,377,455 | $716,216 |
types of companies with the highest SBA Loan Repayment Rates
Ranking | Type In the | # SBA 7a loans from 06 to 2015 (with the exception of currently outstanding loans) | number of loans that have been paid in full | SBA Loan repayment Rate* |
|---|---|---|---|---|
1 | Broilers and other meat processing Businesses | 1183 | 07 | 76.67 % |
2 | Highway, Road and bridge construction Businesses | 596 | 426 | 71.48 % |
3 | Engineering Services | 2156 | 1466 | 68.00 % |
4 | Optometrist Offices | 1029 | 695 | 67.54 % |
5 | Scientific and Technical Consulting Services | 843 | 568 | 67.38 % |
6 | Law Practices | 3271 | 2198 | 67.20 % |
7 | Doctor Offices (except Mental Health Specialists) | 4505 | 3021 | 67.06 % |
8 | Offices of physical, occupational and speech therapists, and Audiologists | 1341 | 894 | 66.67 % |
9 | Miscellaneous Fabricated Metal Product Manufacturing | 682 | 451 | 66.13 % |
10 | Home health care Services | 1354 | 891 | 65.81 % |
* Repayment Loan rate is equal to the number of credits, the fully divided by the number of loans were paid (excluding loans that are currently in circulation). excluded outstanding loans if the repayment rate calculation, because we do not know whether these loans will be repaid by their due date. note also that this table considers only types of businesses, the SBA at least received 1,000 loans (including loans outstanding) 06-2015.
types of companies with the highest SBA loan default Rates
Ranking | Type In the | # SBA 7a loans from 06 to 2015 (with the exception of currently outstanding loans) | number of loans, the goods will be or canceled | SBA Loan default Rate* |
|---|---|---|---|---|
1 | Mortgage and Nonmortgage Loan Brokers | 929 | 683 | 73.52 % |
2 | Residential property Managers | 919 | 554 | 60.28 % |
3 | Offices Real estate and Brokers | 2641 | 1540 | 58.31 % |
4 | General Were Stores | 1106 | 630 | 56.96 % |
5 | Cosmetics, Beauty Supplies and Perfume Stores | 1047 | 576 | 55.01 % |
6 | Used car Dealers | 1268 | 691 | 54.50 % |
7 | Car Washes | 1219 | 664 | 54.47 % |
8 | Women's, Children and infants clothing and accessories distributors Wholesalers | 910 | 495 | 54.40 % |
9 | Gas Stations with Convenience Stores | 3883 | 2109 | 54.31 % |
10 | Family dress Stores | 691 | 368 | 53.26 % |
* credit loss ratio is equal to the number of loans that were canceled or written off (ie settled for less through the owed divided number of loans than the amount) (excluding loans that are currently in circulation). excluded outstanding loans when the failure rate of the calculation, because, if the loans do not know will be repaid by their due date. also, please note only that this table types of companies considered that receive at least 1,000 SBA loan (including outstanding loans) 06-2015.
What can we learn from this information to learn?
the four tables of data handed over to us a good look at how successful different types of businesses were getting loans from SBA and pay SBA loan back. However, it is important to look at the data in context. Here are some examples of what we mean:
- Restaurants - The conventional wisdom is that the lenders do not give love loans in the restaurants , because they are more risky than other types of businesses. However, the data are doubts about this. Full-service restaurants and limited service restaurants by far the biggest got number of SBA loans between 06 and 2015. They came in at numbers 3 or 5 , in relation to their volume of SBA financing. The average loan size was $ 263,579 for full-service restaurants and $ 238,177 for limited restaurants. This is less than the average loan size for hotels, dental offices and other businesses. This suggests that restaurants do get a lot of SBA loans, but that their loan amount may not be so high Hotels
- -. Hotels have not make it into the top 10 in terms of number of SBA loans (they number 15). However, they were number 1 in terms of volume financing. This is the opposite of what we noticed with restaurants. Hotels do not have too many loans, but if they did, they received a large amount of money. This may be because they can collateralize the loans with real estate. The average loan size for the hotel was $ 1,480,60
- meat processing and construction companies -. Broiler companies, other meat processing plants and the contractors were the most successful in Redemption SBA loans. Nearly three-quarters of the loans go to this type of company were paid back in full and on time. Despite, however, how successful these business loans in repayment they were not getting too many loans or a large volume of funding.
All this shows that you are looking at the end of the day with a combination of metrics Number of SBA loans, the volume of SBA financing and real failure rate to to understand how "successful" a company when it comes to SBA loans.
Why is it easier for some types of businesses to get loans than others?
No matter what kind of business you have, the main thing is that the lenders take care of us, if it is a company a loan the owner is able to pay it back give. This is ultimately what determines who gets SBA loans
The "ideal" business will have the following features :.
- High owner credit score - a SBA qualify loan, you need to have a personal credit score of 660 or higher generally. In companies that are perceived as more risky, such as restaurants, you can have even have a higher credit score. If you're not sure if your credit score, here for free check
- Established business . - Generally, SBA loans go to companies that have been for at least 2 years in use. It is difficult, but not impossible, to obtain an SBA loan to start a new business or buy an existing business. For new business or an existing business to buy, you should generally have experience in the industry and a 10-20% deposit
- High turnover and profitability . - Your sales and profits have to be strong for an SBA loan to qualify
- Many collateral -. The more security you can bring to the table, the greater chance you have to qualify for a loan. For this reason, hotels, gas stations and other types of companies that are successful in getting SBA loans often feature rich and device-rich. But even if you have a kind of business are open, which does not have much collateral, you can pledge personal assets as at home or in the car.
- business' debt service coverage ratio (DSCR) over 1.25 - you usually need a DSCR of 1.25 or higher, to get approved for an SBA loan. DSCR is the business 'net operating income divided into the business' loans and interest payments.
If you meet the above-mentioned 5-requirements, you should be able , for a SBA qualify loans, regardless of what industry you are in (Note: certain industries are categorically ruled received from SBA loans)
If you don. 't to meet these requirements, there are many alternatives to SBA loans existing businesses and new business .
bottom Line
Getting a loan SBA is easier in certain industries than in others. sometimes companies but that at obtaining a SBA loan are successful, it does not succeed in paying back on time. Our data shows you which types of businesses are to obtain SBA loans most likely, and pay it back on time. Ultimately, who gets loans SBA is from a particular undertaking "circumstances and the assessment of the lender to pay the loan depends on its ability to return.
If you want to access the raw data we from the SBA ?. get We are delighted to share it please send an email to pprakash@fitsmallbusiness.com
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