What is the SBA
The U.S. Small Business Administration, commonly referred to as the SBA, is the only cabinet-level federal agency fully dedicated to supporting small businesses and entrepreneurs from counseling to capital. Many small businesses turn to the SBA for loans, as SBA loans typically have lower rates and longer durations compared to other traditional bank loans.
SBA 7(a) Loan Program
The SBA’s most popular loan program is the 7(a) loan for small businesses. The 7(a) loan provides financial assistance for entrepreneurs starting a new business or acquiring, operating, or expanding an existing business. The loans must be approved by the SBA.
SBA Data Analysis
Vetted Biz has reviewed and analyzed the SBA 7(a) loan approvals from the fiscal years 2010-2020. The records were obtained through SBA’s official website.
In total, 588,053 small businesses in the U.S. were approved for the SBA 7(a) loan from 2010 to 2020. These businesses are categorized by the North American Industry Classification System, NAICS, that consists of 1,913 classifications. The SBA loan failure rate by NAICS industry code is not statistically significant given the low number of loan issuances in many of the classifications and misclassifications.
SBA Analysis of All Businesses
Of the 588,053 businesses approved for a 7(a) loan, over 53,377 of these businesses were franchise concepts representing roughly 9.08% of approved loans, while the remaining 534,676 loans were issued to non-franchised businesses, or 90.92% of approved loans.
Many of the businesses these loans were previously issued to had different NAICS classifications for each individual loan. Therefore, the Vetted Biz analytics team recategorized these businesses by 14 industries that more accurately reflect the business nature of the concept. Listed below is the count of loans approved for each industry. Note that the Other Business industry only consists of one business; thus, this industry will be excluded from future analysis since there were no loans classified under this industry.