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SBA Loans for Engineers: The Ultimate Guide

In our latest analysis of the top 20 performing industries, Engineering Services (NAICS Code: 541330) ranked #20.  From October 1, 2009 to December 21, 2018, engineering firms received 3,058 SBA loans totaling roughly $1.06 billion.  While “engineering services” is a broad category covering many types of engineers, the need for capital and the value of SBA financing is similar across all categories.

sba loan benefits

According to the U.S. Department of Labor, employment of industrial engineers is projected to grow approximately 10% by 2026.  With this projected growth, access to capital is a very real need for many engineering firms and it’s critical that engineer entrepreneurs understand common event-driven scenarios and key trends surrounding SBA loans.

How to Most Effectively Use an SBA Loan

Many of the demands listed below are the result of changing practices and technology in the engineering field.  While these concepts are vital to growing the industry, many of these scenarios require up-front costs and potential need for capital.

  • Attracting Talent – The demand for highly-skilled, certified employees has dramatically increased since the Great Recession, forcing companies to increase salaries to attract and maintain quality talent.
  • Technology – New and more efficient technology continues to emerge, and its usage is not only becoming more popular, but necessary for many firms to maintain consistent growth.
  • Green Practices – Demand for environmental consideration continues to increase and many firms are paying for their employees’ Leadership in Energy and Environmental Design (LEED) certifications.
  • Business Acquisitions – Changing demographics and the retirement of professional service firm owners creates an opportunity for business acquisition and expansion.

With SBA 7(a) financing, engineering companies can continue to grow alongside the trending demands of today’s marketplace.

Key Statistics & Trends

Here are key takeaways and trends for engineering firms that have obtained financing through the SBA 7(a) Loan Program since 2010.

  • Volume Trends – Last year, engineering firms obtained more than $143 million through the SBA 7(a) Loan Program, making the FY2018 the year with highest dollar volume authorized to engineering firms over the last decade.
  • Loan Size – The average loan size for engineering firms jumped from $194,000 in FY2010 to $507,000 in FY2018, representing a 161% increase during this period (avg. loan size for the entire program was roughly a 60% increase during this same period).
  • Top States – California, Texas and Florida ranked as the top dollar volume states respectively for engineering borrowers and Ohio followed thereafter with more than $50 million, or 5% of the total volume for engineers (Ohio borrowers obtained roughly 3.5% of the total volume through the entire program during this same period).

sba 7(a) loans for engineers graph

Accessing capital through the SBA 7(a) Loan Program is one of the best ways for engineering firms to expand.  Changing practices in technology and increasing professional costs will require many of these firms seek financing to continue to grow.  In the years ahead, expect to see engineering firms break the industry’s record set in FY2018 of $143 million in loan volume through the SBA 7(a) Loan Program.

Be on the lookout for similar upcoming content that will take a deeper dive on key trends and takeaways across other top industries that made our list.

About Windsor Advantage, LLC

Windsor Advantage provides banks, credit unions and CDFIs with a comprehensive outsourced SBA 7(a) and USDA lending platform.

Since 2010, Windsor has processed more than $2.3 billion in government guaranteed loans and currently services a portfolio in excess of $1.3 billion (as of May 31, 2019) for over 85 lenders nationwide. With more than 150 years of cumulative SBA and USDA lending experience, cutting edge technology, rigid controls and consistent processes, Windsor is uniquely qualified to assist any size lender with implementing a thoughtful and profitable government guaranteed lending initiative.

Windsor Advantage has a team of 30 professionals with offices in Chicago, Illinois; Indianapolis, Indiana; Seattle, Washington and Charleston, South Carolina.

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