Lending Intelligence
Who’s Getting Funded in 2025? A Deep Dive into SBA 7(a) Borrower Profiles
Not all SBA 7(a) borrowers are alike, but many share key traits that reveal how lenders are navigating credit decisions in today’s market. Powered by LenderAI Insights and SBA data, we took a closer look at who’s borrowing in FY2025 and how their profiles are evolving.
In our last post, we examined borrower demographics—gender, race, and veteran status—to uncover how different communities access SBA capital. This time, we’re zooming in on the people behind the approvals—the business owners, operators, and entrepreneurs who define the borrower mix.
Whether you’re a lender refining your approach or just trying to make sense of today’s SBA landscape, understanding these borrower profiles is key to staying ahead.
Every SBA 7(a) loan represents a business owner with a plan. Whether they’re scaling up, starting fresh, or taking over an existing operation, these entrepreneurs share common traits that show up again and again in the lending landscape. Based on current FY2025 trends, a few borrower archetypes stand out.
Small but mighty, these businesses typically have five or fewer employees and operate as LLCs. They make up the largest share of SBA approvals. Borrowers in this category are often seeking capital to stabilize operations, expand services, or hire their first employees.
These businesses have moved beyond the startup phase and are ready to scale. With 11–25 employees and at least two years of operational history, they often seek funding to invest in infrastructure, systems, or new markets.
These businesses are often run by a solo founder or small team operating under a sole proprietorship or single-member LLC. This archetype includes consultants, creatives, retail shops, and tradespeople seeking modest loans to invest in equipment, manage cash flow, or expand services.
These are the seasoned players—businesses with staying power, deeper financials, and structured operations. They receive loans less frequently than microbusinesses but when they do, they often request larger funding amounts to support bigger infrastructure or strategic investments.
This borrower isn’t launching a business—they’re buying one. Whether through generational transitions, strategic acquisitions, or partner buyouts, these loans reflect a growing trend in SBA lending: the rise of ownership transitions.
Microbusinesses with 1–5 employees have dominated loan approvals, with 62% of all approvals in FY2025. These borrowers—captured in the Microbusiness Owner and Independent Owner archetypes—are foundational to the SBA program.
But when you look at loan volume, a different story emerges. Borrowers with 11–25 employees—the Growth-Stage Operators—account for just 14.1% of approvals but received 22% of the total dollars, showing that lenders are committing more capital to businesses already in expansion mode.
Larger firms (26–100 employees), which match the Established Operator profile, received fewer approvals but still represent a notable share of dollars. These businesses tend to be more stable, better capitalized, and more likely to have collateral, making them attractive despite lower volume.
Takeaway: Lenders are still heavily supporting small borrowers but are increasingly directing larger capital to scale-ready businesses.
LLCs continue to receive the most loan approvals and funding volume, accounting for over 61% of loans and more than $16 billion in volume year-to-date. This structure cuts across nearly every borrower archetype—Microbusiness Owners, Growth-Stage Operators, even Acquisition Entrepreneurs—due to its flexibility, tax simplicity, and legal protections.
Corporations and Subchapter S Corps represent more mature or structurally complex borrowers, often Established Operators or Acquisition Entrepreneurs, with a combined 32.2% of approvals.
Sole proprietorships, while small in share (4.2% of loans), represent a reliable borrower base for community lending, especially among Independent Owners.
Takeaway: The LLC is the default borrower structure, but understanding the nuances of how different entity types map to borrower goals helps lenders streamline onboarding, documentation, and compliance.
A majority of approved loans (61.7%) went to established businesses with at least two years of history, representing the Growth-Stage Operators, Established Operators, and some Acquisition Entrepreneurs. These businesses typically have financials to back their requests, making them more attractive to lenders.
Startups and newer businesses still command attention. Together, Startup and New Business categories account for 29.1% of approvals and a combined $7.47B in volume. These figures underscore the SBA’s continued role in supporting entrepreneurship at the earliest stages, including among Microbusiness Owners and Independent Owners.
Notably, change-of-ownership loans now represent nearly a quarter of total dollars approved, the largest share in at least three years. This aligns with the rise of the Acquisition Entrepreneur, a borrower archetype driving high-value, often collateral-backed deals.
Takeaway: Experience still tips the scale in underwriting—but acquisition activity is increasingly rivaling startups as a top capital destination.
In FY2025 YTD, over 18,700 loans were fully collateralized, while just over 4,000 were not. Borrowers like Growth-Stage Operators, Established Operators, and Acquisition Entrepreneurs are far more likely to bring sufficient business assets or acquired entity backing to meet collateral expectations. These deals align well with SBA’s updated SOP standards.
In contrast, Microbusiness Owners and Independent Owners often lack sizable assets and may rely on personal guarantees or partial coverage. These loans tend to be smaller, but they require thoughtful risk structuring and close adherence to SBA guidelines.
Takeaway: Understanding how collateral aligns with borrower type helps lenders not only meet SOP requirements but also offer smarter loan products for each archetype.
The SBA borrower base is evolving, but not randomly. Each trend in size, structure, age, and collateral ties directly to one of these five borrower types.
Lenders that understand these archetypes, not just categories, are better equipped to:
For lenders, knowing who’s applying, how they’re structured, and what they need helps build stronger portfolios, streamline decisions, and meet the needs of today’s borrowers more effectively.
Want to explore these trends further? Sign up or log in to your free LenderAI Insights account to dive deeper into borrower profiles, track approval shifts, and tailor your lender strategy in real time.
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