Lending Insights
Top 10 Industries Leading SBA Loan Approvals Under $500K in FY2024
In 2024, SBA 7(a) loans under $500K remained a vital resource for franchise growth, offering smaller businesses the funding needed to innovate, scale, and compete in today’s fast-moving markets. These loans have become a cornerstone for franchisees looking to build or expand their operations while maintaining manageable financial commitments.
Using data from LenderAI Insights, we’ve identified the top 10 franchises that made the most of SBA funding last year. By exploring what sets these businesses apart—like strong business models, market demand, and smart growth strategies—this analysis offers practical takeaways for franchisees and lenders alike. Whether you’re exploring franchise opportunities or looking to optimize your lending strategy, these insights can help you tap into the growing potential of SBA-backed financing.
The market demand for SBA 7(a) loans, particularly for amounts under $500,000, has been steadily growing. These smaller loan sizes are well-suited for franchises that require lower initial investments, such as service-oriented or home-based businesses. For lenders, smaller SBA 7(a) loans offer an opportunity to diversify their portfolios with relatively low risk since they are partially guaranteed by the SBA. This creates a scalable entry point for lenders to meet the needs of small business owners while expanding their own footprint in the thriving franchise financing market.
The UPS Store claimed the top franchise spot for SBA funding in 2024, securing an impressive $27.7 million. This achievement highlights the franchise's stronghold in the expanding e-commerce sector, where reliable shipping and logistics are critical. In comparison, PostalAnnex+ received $1.6 million in SBA funding, while Postal Connections followed with $148,000, underscoring The UPS Store's dominant market share in SBA-backed loans.
With low operating costs, a loyal customer base, and strong cash flow potential, The UPS Store continues to be a top choice for franchisees and lenders alike. Its widespread presence in communities across the U.S. enhances its reputation, while robust corporate support in marketing and operations reduces risks for franchisees. These factors solidify its position as a premier investment opportunity for SBA-backed funding.
Hotworx, renowned for its innovative 24-hour infrared sauna workouts, secured the second-highest spot in SBA funding for 2024, with $21.6 million. Representing 17% of the franchise market share in SBA funding, Hotworx has carved out a unique position in the rapidly expanding wellness industry. Its combination of infrared heat therapy and high-intensity workouts appeals to health-conscious consumers seeking efficient, cutting-edge fitness solutions.
The brand's streamlined business model—featuring minimal staffing requirements and a compact physical footprint—helps keep operational costs low and profitability high. These advantages position Hotworx as a standout contender in the evolving wellness market, attracting both franchisees and lenders looking for strong growth opportunities.
The Learning Experience, a leading early childhood education franchise, earned the third spot in FY2024 with $12 million in SBA funding. The franchise focuses on providing high-quality education for young children through a proven curriculum that promotes early childhood development. This growth is likely due to the increasing demand for early childhood education, fueled by the rise of dual-income households seeking reliable and enriching care for their children. The Learning Experience’s steady enrollment numbers, strong reputation, and ability to adapt to various markets have made it an increasingly attractive option for SBA lenders. The brand’s continued success reflects the growing interest in education-focused franchises and its strong potential for long-term growth.
Alloy Personal Training, a fitness franchise specializing in personalized, small-group training experiences, experienced a significant increase in SBA funding, going from $2.9 million in 2023 to $9.8 million in 2024. The brand offers a unique approach to fitness focusing on high-intensity, individualized workout plans for clients in small groups. Alloy’s growing SBA funding numbers reflect confidence from lenders in the brand's scalability, profitability, and ability to deliver consistent returns. Its ability to secure nearly $10 million in SBA loans in FY2024 highlights its strong performance and growth trajectory. By focusing on personalization, efficiency, and a high-value target market, Alloy Personal Training has solidified its position as a rising star in the fitness franchise space.
Scenthound, a unique pet care franchise, specializes in wellness-focused grooming services for dogs. Unlike traditional pet grooming, Scenthound emphasizes the health benefits of regular grooming as part of a pet’s overall wellness routine, ensuring healthier, happier pets. The franchise operates on a membership model, providing consistent, recurring revenue that offers financial stability to franchisees. With the pet care market continuing to grow, especially among health-conscious pet owners, Scenthound has been able to capitalize on this trend. Its steady growth in funding from $6.5 million in 2023 to $7.6 million in 2024 reflects the increasing demand for specialized pet care services and the brand’s appeal to SBA lenders seeking stable and profitable investments in the expanding pet services industry.
Subway, one of the largest and most recognized brands in the restaurant industry, secured $7.2 million in SBA funding in 2024. While the brand faces increasing competition in the fast-food sector, Subway's well-established reputation and its ability to adapt in a crowded market continue to drive its success. The brand thrives by operating in diverse formats, including nontraditional locations like gas stations and airports, and by consistently innovating its menu to meet evolving consumer tastes. These factors have allowed Subway to maintain strong, steady revenues and attract ongoing interest from SBA lenders, making it a stable and appealing investment, even amidst rising competition in the market.
Success on the Spectrum saw a significant jump in SBA funding, increasing from $2.3 million in 2023 to $6.2 million in FY2024. This growth reflects the increasing demand for specialized autism therapy services. The brand' s focus on high-quality, individualized care and its strong operational framework have made it an attractive option for both franchisees and lenders, contributing to its impressive funding increase.
Naturals2Go, a franchise operating in the automated vending space, secured $6 million in SBA funding in 2024. The automated vending model, renowned for its low operational costs and scalability, remains a strong investment opportunity, particularly as demand for healthier snack options continues to rise. Naturals2Go's focus on offering on-the-go, nutritious snack choices sets it apart from traditional vending services, positioning it as a forward-thinking player in the evolving retail market.
The automated vending space is increasingly attractive to SBA lenders due to its minimal overhead, ease of expansion, and ability to meet the growing consumer preference for convenient, healthier alternatives. As the retail landscape continues to evolve, Naturals2Go’s model offers a low-risk, high-growth opportunity, making it an appealing option for both franchisees and investors seeking scalable business ventures in the fast-paced, health-conscious market.
Marco’s Pizza, known for its high-quality pizza offerings and strong community ties, saw a slight increase in SBA funding, going from $5.1 million in 2023 to $5.9 million in 2024. This growth can be attributed to the brand’s emphasis on fresh, authentic ingredients; a loyal customer base; and its ability to engage deeply with local communities. While the pizza segment remains highly competitive, Marco’s Pizza has maintained its position through consistent innovation, including menu updates and customer-focused marketing. Additionally, the comprehensive support it offers franchisees, including site selection and training, has made it an appealing investment for SBA lenders looking for stable, growth-oriented opportunities in the quick-service restaurant spacer.
EverLine Coatings and Services, specializing in commercial maintenance with a focus on pavement marking and lot resurfacing, secured $5.6 million in SBA funding for 2024. The brand has carved out a valuable niche in the essential services market, where demand remains steady due to the ongoing need for property upkeep. EverLine’s low startup and operational costs, along with its broad appeal to both first-time and experienced franchisees, make it an attractive investment for SBA-backed loans under $500K.
The commercial maintenance and services industry, as exemplified by EverLine, offers strong investment potential. Other businesses in this sector, like 1-800-STRIPER ($3.1 million in SBA funding) and Superior Fence & Rail ($949,000), highlight the demand for essential services that ensure the upkeep of properties and infrastructure. With relatively low entry costs and the scalability of service-based models, the industry presents a robust opportunity for both franchisees and lenders, solidifying it as a strong space for SBA-backed funding.
Certain regions, such as Los Angeles, Cook County (IL), and Miami-Dade (FL), stood out as emerging hotspots for SBA franchise loan activity in 2024. These areas represent regions with booming franchise markets, offering substantial opportunities for lenders. By focusing on high-performing counties, lenders can maximize their loan approvals and strategically grow their portfolios in these flourishing areas, tapping into the growing demand for franchise opportunities across different sectors.
Industries such as wellness, pet care, and essential services experienced notable growth in SBA franchise funding. Brands like Hotworx, Scenthound, and EverLine Coatings exemplify this trend by meeting evolving consumer demands. Lenders can benefit by aligning with these high-growth niches, supporting franchises that cater to shifting market preferences and lifestyle trends.
Scalable franchises with low operational costs, like Hotworx and Naturals2Go, continued to attract SBA funding in 2024. Their streamlined operations and focus on convenience or health-conscious offerings position them as appealing investments for both lenders and franchisees seeking sustainable growth opportunities.
Established brands like The UPS Store and Subway maintained strong market positions, securing substantial SBA-backed funding in FY2024. Their proven business models, large customer bases, and adaptability to market changes contributed to their sustained success.
The franchise sector is experiencing substantial growth, with various brands—like The UPS Store, Hotworx, and Scenthound—securing significant SBA funding in 2024. Brands with lower operational costs, strong market positioning, and solid business models are proving to be attractive to both lenders and franchisees. Hot sectors like wellness, pet care, and essential services are demonstrating the diverse and profitable opportunities available. As demand for these services continues to rise, both new and established franchisees can look to SBA-backed loans as a crucial resource for capitalizing on these opportunities. With the right strategies, lenders can identify trends and align their portfolios with the high-growth potential seen in these industries.
The increasing demand for franchises and their expansion across diverse sectors signals continued growth within the industry. SBA loans remain a vital resource for both new and established franchisees looking to scale and expand their businesses. By leveraging geographical insights, average loan data, and emerging trends, lenders can refine their strategies, identify key investment opportunities, and position themselves to benefit from the rapidly growing franchise market.
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