ISSUE 002
The SBA does not lend money
Last time in this pillar the honest conclusion was that most companies die building something nobody asked for. The natural follow-up is money — who has it, who decides, and whether any of that is visible from outside. It turns out to be unusually visible, which is not what I expected going in.
An idea worth thinking about
Nobody at the SBA will ever look at your application
The 7(a) program is a public-private partnership, and the division of labor inside it is the part people get wrong. Lenders make the credit decisions and lend the money, exactly as with a conventional loan. The federal government guarantees a portion — up to 85 percent on smaller loans, 75 percent on larger ones — which lowers the lender's risk and is the whole reason a bank will say yes to a business it would otherwise decline.
So "I'm applying for an SBA loan" describes the product, not the counterparty. You are being judged by a bank, using that bank's appetite, on that bank's timeline. Under the Preferred Lender Program some lenders hold delegated authority and don't route the decision through SBA at all.
The practical consequence is that lender selection is a real decision and most first-time borrowers treat it as an afterthought. Lenders differ enormously in the size of loan they typically write — some do high volumes of smaller loans, others write far fewer at many times the average. Approaching one whose normal loan is ten times what you need is not a rejection of your business. It's a mismatch you could have seen coming.
Read the 7(a) program terms
A tool I disappeared into
Every SBA loan approved since 1991, name by name, in public domain CSVs
This is the most startling public file I've come across doing this. SBA's Office of Capital Access publishes loan-level data on all 7(a) and 504 loans approved since fiscal year 1991, released under FOIA, licensed public domain, updated quarterly and typically posted about a month after the quarter closes. The 7(a) data is segmented by decade across four files — the fiscal 2010 to 2019 file alone runs 244 megabytes — and a data dictionary comes with it so the columns mean something.
You can see who borrowed, where, through which lender, and for how much. Which means you can answer questions nobody will answer for you: which lenders are actually active in southeast Missouri, what a typical approved loan in your industry looks like here, whether the institution you're about to approach has ever written a loan your size in your county.
If a quarter-gigabyte CSV isn't your evening, SBA also runs interactive dashboards on the same data — including a State and County Program Summary Report and a lender report you can filter by state, program and fiscal year. Same source, no spreadsheet required.
Open the loan-level data
Learn something
Ten thousand volunteers give away four million hours a year
SCORE is an SBA resource partner and the largest network of volunteer business mentors in the country, running on roughly 10,000 volunteers who collectively provide about four million hours of free mentoring annually. Mentoring is free, confidential, available virtually or in person, and unlimited — you can go back as often as you want at no cost. SCORE reports helping start 59,447 businesses in 2024 alone.
Two things to set expectations on. Mentors are volunteers, usually current or former business owners and professionals, so match quality varies with who you draw — if the fit is wrong you can request someone else, and you should. And while one-on-one mentoring is free, some local workshops carry a nominal fee, so "free" describes the mentoring rather than everything on the calendar.
Worth pairing with the loan data above. Going into a lender conversation having already read what got approved in your county, with someone who has sat on the other side of that table, is a materially different meeting than going in cold.
Request a mentor
What we’re seeing
Startups got about one in seven SBA loans. Existing businesses got the rest.
In figures SBA reported at the close of fiscal 2025, the agency approved more than 58,000 7(a) and 504 loans representing over $32 billion. Within that, about 8,900 loans totalling $5.6 billion went to small business startups, and roughly 3,500 loans worth $2.6 billion went to small manufacturers.
Do the division and the shape of the thing appears. Startups took around 15 percent of the loans and about 17 percent of the dollars — call it one in seven. The average startup loan lands near $629,000, noticeably above the overall average, which tells you these are not coffee-money loans; they're acquisitions, buildings, equipment. That arithmetic is mine, not SBA's, but it follows directly from their numbers.
The useful read for anyone starting something here is a corrective in both directions. Startups are not shut out of this system — nearly nine thousand of them got funded in a single year, which is a great deal more than the venture capital story would suggest. But the majority of this capital goes to businesses that already exist and can show a lender some history. If you have none, you are competing for the smaller share, and you want the loan-level file open when you decide who to ask.
One structural detail worth knowing: by statute these programs are designed to operate at zero subsidy to taxpayers, funded by fees rather than appropriations. That's why they persist across administrations that agree on very little else.
SBA Office of Capital Access
One question
Have you ever actually talked to a lender?
Not applied — talked. Reply yes or no. I want to know whether the barrier is rejection or whether the conversation never happens.
More in this pillar as it's written.
— Shana
Sources link to the original publisher, never to a summary.