Lending Insights
Leading Franchises that Received SBA Funding under $500K in FY2024
SBA loans under $500,000 are a cornerstone of small business financing, offering entrepreneurs the accessible funding they need to succeed. These loans not only empower business owners but also play a crucial role in bolstering local economies.
For lenders and banks, understanding regional lending trends is critical to identifying growth opportunities. Using our proprietary tool, LenderAI Insights, we analyzed the top 5 states leading approvals for SBA loans under $500K in Fiscal Year 2024. This analysis uncovers valuable insights that help lenders respond to regional opportunities, refine their strategies, and support small businesses across growing industries.
At the top of the list is California, where businesses were approved for $1,076,377,400 in SBA loans under $500K. The state’s economic diversity, spanning sectors such as technology, agriculture, and entertainment, creates a broad and dynamic lending landscape. Urban centers like Los Angeles and San Diego are major drivers of demand, particularly in industries such as food services, healthcare, and retail. Additionally, California’s large population of entrepreneurs, combined with a significant concentration of minority-owned businesses, highlights the critical need for accessible financing solutions to support growth and innovation across various sectors.
Emerging trends show a surge in lending to tech startups, especially in areas like Silicon Valley. The demand for micro-loans to support software development, coworking spaces, and remote business models is growing. Lenders should also consider regional variances, with Northern California presenting opportunities in agri-tech and renewable energy financing. Understanding these dynamics enables lenders to offer products that cater to California’s multifaceted economy.
Deeply influenced by its tourism-driven economy, Florida businesses were approved for $784,040,700 in SBA small-dollar loans in 2024, reflecting the state’s vibrant entrepreneurial landscape. Hotspots like Miami and Orlando played a pivotal role in this surge, with thriving industries such as hospitality, seasonal retail, and healthcare leading the charge.
Full-service restaurants secured $28,139,400 in gross approvals, driven by the state’s bustling tourism and dining scene. Plumbing, heating, and air conditioning contractors followed with $21,311,300, highlighting the constant demand for infrastructure maintenance and climate control solutions. Specialty trade contractors received approval for $20,189,100, fueled by Florida's ongoing construction and renovation boom. These figures underscore the SBA’s critical role in empowering small businesses and sustaining key industries across the Sunshine State.
In Fiscal Year 2024, Texas businesses were approved for $690,758,500 in SBA loans under $500K. The state's business-friendly policies, combined with its role as a logistics hub, create expansive opportunities for SBA lending. Cities like Houston (Harris County) and Dallas are leading the way in industries such as construction, quick-service restaurants, and transportation services. The rise of e-commerce has amplified the demand for warehousing and last-mile delivery services, rapidly expanding sectors in Texas.
Lenders should also focus on rural areas, which often lack access to competitive financing options. The agriculture and energy sectors, which are integral to the state’s economy, require specialized loan products. Additionally, Texas’s population growth—particularly in suburban areas—has fueled the demand for new infrastructure and local services, offering further opportunities for targeted lending strategies.
Small businesses in New York demonstrate the power of resilience in a high-cost environment, securing $622,853,300 in approvals through SBA small-dollar loans. Businesses in Kings County (Brooklyn) were approved for $111,880,200 in FY 2024, followed by New York County (Manhattan) with $79,739,300 in SBA loan approvals under $500K. Leading industries include full-service restaurants, residential remodelers and plumbing heating and air conditioning contractors.
Additionally, the rise of remote work has fueled demand for loans to small businesses providing coworking spaces and IT support. Outside the city, upstate New York presents opportunities in manufacturing and renewable energy, with smaller loan amounts often serving as critical capital for startups in these sectors.
Showcasing its growing prominence as a leader in small business innovation, Ohio businesses were approved for $394,790,500 in SBA 7(a) loans under $500K. The state’s economy, anchored by the manufacturing, healthcare, and technology sectors, showcases a dynamic shift toward advanced industries. For businesses seeking smaller SBA loans under $500K, lending activity is concentrated in urban centers such as Columbus, Cleveland, and Cincinnati, with suburban and rural areas also seeing increased demand for small business financing.
Known as the “Silicon Heartland,” Ohio is becoming a hub for entrepreneurial growth in the Midwest. As businesses in the region expand into emerging industries like semiconductor manufacturing and green energy, the demand for accessible financing continues to rise. Ohio’s evolution underscores the importance of targeting states with dynamic, evolving economies that may not rely solely on large population centers but still offer significant opportunities for lenders.
Population Correlation: It should come as no surprise that the most populous states in the nation -- California, Florida, Texas, and New York—hold the top four spots for SBA small business funding in fiscal year 2024. This correlation highlights the critical role that population density and business ownership rates play in driving demand for small business financing. States with higher populations tend to see greater entrepreneurial activity and more diverse economic needs, creating strong opportunities for SBA lending.
State-Specific Focus: State-specific focus is crucial for lenders looking to optimize their SBA loan offerings. Each state’s unique industry composition and economic drivers shape the demand for small business financing. For example, California’s tech and entertainment sectors, Florida’s tourism and healthcare industries, and Texas’s energy and manufacturing landscape each present distinct lending opportunities.
Leading Industries: Industries like food services, healthcare, and logistics continue to dominate SBA loans under $500K. Food services, including restaurants and catering, drive demand for financing for equipment and expansion. The healthcare sector, especially home healthcare and small medical practices, is growing rapidly due to an aging population, requiring capital for workforce and technology upgrades. In logistics, as e-commerce continues to thrive, small businesses in the transportation, warehousing, and supply chain management fields are actively seeking capital to invest in infrastructure and meet the rising demand for faster delivery services.
Rural Markets Present Untapped Potential: Rural regions are becoming increasingly active as small businesses in agriculture, manufacturing, and healthcare seek financing. In Texas, for example, the growing demand for agricultural technology and equipment upgrades in rural areas is a key driver of loan activity. Similarly, Ohio’s rural communities are seeing expansion in sectors like logistics and healthcare.
In Fiscal Year 2024, California, Texas, Florida, New York and Ohio led SBA lending under $500K, reflecting diverse economic strengths and entrepreneurial activity. For lenders and banks, understanding these trends is key to capitalizing on the growing demand for accessible small business financing. Regional trends in SBA lending under $500K reveal key insights for lenders aiming to maximize impact and efficiency. By understanding the unique economic drivers and borrower needs in each of these leading states, lenders can better align their offerings to serve small businesses effectively. Whether it’s targeting niche industries, expanding into underserved areas, or supporting minority-owned businesses, strategic approaches tailored to regional dynamics will help lenders build stronger portfolios and foster meaningful economic growth.
Sign up for LenderAI Insights today to leverage SBA data so you can refine your regional lending strategies and identify new growth opportunities in 2025.
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