SBA Lending to Existing Businesses > 2 Years Old
SBA Loans to Businesses > 2 Years Old
FY 2024 SBA Loans
Existing Businesses Over 2 Years Old
Existing businesses over 2 years old is by far the biggest recipient of SBA loans in general but the smallest recipient when it comes to franchise lending. Established business loans have accounted for 42% to 49% of funded SBA loans over the last few years. In FY2024, 45% of funded SBA 7(a) loans went to established businesses while only 15% of SBA lending went to established franchise businesses over 2 years old.
Businesses that have been operating for two years or more generally have a stronger position when seeking a loan. This established track record provides lenders with valuable data including two years tax returns to assess risk and make more informed lending decisions. Two years of business operations allow for the development of a credit history, demonstrating a track record of paying bills, meeting financial obligations, and making a profit.
Lenders of course prefer loans where they are able to analyze historical financial statements to assess revenue growth, profitability, and overall financial performance. A proven track record of success, even early on, mitigates some of the inherent risks associated with lending to new and unproven businesses.
Existing Businesses Over 2 Years Old Receiving SBA Loans
SBA 7(a) Loans in FY2024
1,065 banks funded 36,250 loans to existing businesses over 2 years old from 814 industries. For franchise loans to businesses over 2 years old there were 267 banks funding 1,045 loans in 163 industries for 589 brands.
Existing businesses were funded in all 50 states with borrowers from 5,791 cities. 48 states had a franchise loan funded from borrowers from 734 different cities.
Existing businesses over 2 years old represented 45% of all funded dollars and 15% of franchise funded dollars.
75% of banks funded a an existing business over 2 years old loan with 15% of banks funding an established franchise business.
Average loan amount was $347K with the average franchise funded loan at $808K.
There were 2,802 loans over $1 million loan amount provided to established businesses with 222 going to established franchise businesses.
73% of funded loans to existing businesses over 2 years old were provided by out-of-state lenders and 75% of established franchise business loans.
Top Industries for SBA Loans to Existing Businesses Over 2 Years Old
There were 814 industries having a funded loan to an existing business over 2 years old and 163 industries for franchise loans.
Project State Map for SBA Loans to Existing Businesses Over 2 Years Old
Existing businesses were funded in all 50 states with borrowers from 5,791 cities. 48 states had a franchise loan funded from borrowers from 734 different cities.
Out of State Lenders Dominate Market Share
75% of established business loans up to $150,000 are funded by out of state lenders.
74% of established business loans up to $500,000 are funded by out of state lenders.
67% of established business loans over $500,000 are funded by out of state lenders.
69% of established business loans over $1 million are funded by out of state lenders.
75% of established business franchise loans up to $150,000 are funded by out of state lenders.
70% of established business franchise loans up to $500,000 are funded by out of state lenders.
72% of established business franchise loans over $500,000 are funded by out of state lenders.
70% of established business franchise loans over $1 million are funded by out of state lenders.
This article is authored by Darin Manis, founder of LoanBox.
Source: All SBA 7(a) data shared is based on all SBA lending from all sources and not from SBA lending through LoanBox. SBA data and reports are not from the SBA but from SBA data from the lending analytics platform developed and maintained by SBADNA Analytics. SBADNA and LoanBox are both owned by the same parent company FuseSync LLC. LoanBox and SBADNA does not validate or verify the data released by the SBA and provides no warranty of data accuracy or completeness.