5 States With The Highest SBA 7(a) Loan Amounts

Access to capital can make or break a business, and U.S. Small Business Administration (SBA) 7(a) loans are designed to help business owners fill funding gaps. SBA 7(a) loans offer loans up to $5 million that can be used for working capital, real estate purchases, construction of a new building and much more. However, whether you qualify and the amount you can borrow depends on factors like your business revenue and credit.

Key Takeaways

• Georgia tops the list as the state with the highest five-year average SBA 7(a) loan amount at $840,145
• Hawaii bottomed out on our list as the state with the lowest five-year average loan amount at $213,504
• The top five states include Georgia, Texas, California, Louisiana and Arkansas
• Four out of the 10 most populous states in the U.S. rank among the top 10 states with the highest five-year average 7(a) loan amount
• The five states at the bottom of the list include Hawaii, Maine, Massachusetts, Ohio and New Hampshire
• The average SBA 7(a) loan amount was highest nationwide in 2021, at $704,581, out of the five total years of data we analyzed; in 2022, average loan amounts fell to $538,903, a decrease of over $165,000 compared to the prior year

5 States With the Highest Average SBA 7(a) Loan Amounts

To find out which states have the highest average SBA 7(a) loan amounts, Forbes Advisor analyzed data from the SBA. We looked at data for all 50 states and the District of Columbia from the fiscal year 2018 through 2022 and ranked states based on a five-year average.

1. Georgia

Five-year average SBA 7(a) loan amount: $840,145

The Peach State ranks at the top of our list with the highest average SBA 7(a) loan approval amounts in 2019, 2020, 2021 and 2022. In 2018, it ranked second-highest after Alaska.

Georgia is also the only state to see an average annual SBA 7(a) loan amount higher than $1 million. In 2021, Georgia lenders approved 1,758 SBA 7(a) loans, with total funding of over $1.82 billion, yielding an average loan amount of $1,036,366.

2. Texas

Five-year average SBA 7(a) loan amount: $738,427

The Lone Star State comes in second behind Georgia despite having an average loan amount that’s $101,718 less than Georgia’s. Nevertheless, Texas has consistently ranked among the top five states with the highest loan approval amounts since 2018.

Taking a look at years individually, small businesses in Texas were approved for the second-highest average 7(a) loan amounts in 2019, 2020 and 2022, and the fourth-highest amounts in 2018 and 2021.

3. California

Five-year average SBA 7(a) loan amount: $702,262

California, the most populous state in the U.S., takes third place, with an average five-year SBA 7(a) loan amount sitting at $702,262. The Golden State hasn’t always ranked in the top five but has made at least the top 10 in all five years that we considered. Its average 7(a) loan amounts ranged from a low of $551,814 in 2019 to a high of $986,816 in 2021.

4. Louisiana

Five-year average SBA 7(a) loan amount: $701,856

Louisiana has an average five-year loan amount that’s just $407 less than California’s, putting it in a close fourth place. Of the five years we considered, 2021 was the only year Louisiana did not crack the top 10 for its average loan amount, but it came close in 11th place.

5. Alaska

Five-year average SBA 7(a) loan amount: $672,935

Alaska rounds out our top five, with an average loan amount of $672,935. However, the Last Frontier was at the very top of this list in recent history.

In 2018, small businesses in Alaska received the highest average loan amount of any state. That year, 105 small businesses were approved for SBA 7(a) loans, with funding totaling more than $84.7 million, yielding an average loan amount of $807,051.

5 States With the Lowest Average SBA 7(a) Loan Amounts

Below is a list of states that offered the lowest average SBA 7(a) loan amounts in the past five years.

1. Hawaii

Five-year average SBA 7(a) loan amount: $213,505

Despite its high cost of living, Hawaii clocks in with the lowest five-year average loan amount of just $213,505. Over the past five years, Hawaii ranks consistently low for average loan amounts compared to other states. In 2018, the Aloha State ranked sixth-lowest for its average loan amount, and it’s been dead last for the past two years (2021 and 2022).

2. Maine

Five-year average SBA 7(a) loan amount: $247,794

This New England state has consistently ranked in the bottom five states for its average annual SBA loan approval amount over the past five years.

3. Massachusetts

Five-year average SBA 7(a) loan amount: $272,751

Coming in third-lowest on the list is Massachusetts, which has had an average loan approval amount of just $272,751 for the past five years. Similar to Maine, Massachusetts has consistently ranked bottom five for its loan amounts approved between 2018 and 2022.

4. Ohio

Five-year average SBA 7(a) loan amount: $306,824

Ohio ranked fourth-lowest for its average loan amounts approved from 2018 to 2022, at $306,824. Ohio’s lowest ranking year was 2021, when the state offered the third-lowest average loan amount for SBA 7(a) loans nationwide.

5. New Hampshire

Five-year average SBA 7(a) loan amount: $313,939

New Hampshire is the second New England state to make this list and has a five-year average loan approval amount of $313,939. In 2018 and 2019, New Hampshire ranked towards the middle of the pack relative to other states and Washington D.C. but ranks lower overall due to relatively low average loan amounts in 2020, 2021 and 2022.

How To Get an SBA 7(a) Loan

Applying for an SBA loan is similar to applying for other small business loans, but it does involve extra paperwork and could take one to two weeks to receive a decision.

To be eligible for an SBA 7(a) loan, you must operate for profit, have a need for a loan and use other funding types (like personal assets) before seeking financial assistance. You can negotiate SBA loan rates with the lender, though rate maximums apply. As for other business loan requirements, the SBA doesn’t set a minimum credit score, but having a minimum score of 650 may help your approval odds. Below are the steps for getting an SBA 7(a) loan:

1. Search for SBA lenders. The SBA has a lender match tool that can help you shop for loans. After completing a questionnaire about your business, information is sent to lenders and they can reach out to you with loan options.
2. Complete SBA loan forms. Applicants for SBA loans have to turn in specific forms, like SBA Form 1919, which asks for information about you and the purpose of your loan. SBA Form 413 asks you to list your assets, liabilities and sources of income.
3. Compile your business financials. Besides the forms above, lenders may ask for other information, such as financial statements from your business, business licenses and income tax returns. The SBA website has a checklist of information to gather.
4. Submit documents. Turn in completed forms to your lender of choice and ask what other information is required. The SBA website states that lenders may ask you to submit additional forms on a case-by-case basis.

How To Qualify for Higher SBA 7(a) Loan Amounts

Businesses that have consistent revenue, manageable debt and strong credit may qualify for higher loan amounts. That’s because these business attributes indicate you have the financial means to pay the money back. Below are tips to get a business loan with a high loan amount:

• Reduce your debt. Your annual debt obligations may be compared to your operating income to determine the loan amount and payments you can afford. Reducing other business debt obligations could help you obtain a bigger loan.
• Build personal and business credit. Coming up with a plan to improve your credit scores could help you qualify for larger loans. Making on-time payments on all debts and keeping your debt usage low are two crucial steps that could help increase your scores.
• Pledge collateral. Lenders can offer up to $25,000 for an SBA 7(a) loan without collateral. If you have collateral to pledge, like equipment or property, using it to back the loan could help you get a higher loan amount. However, the lender can repossess the collateral if you fail to repay, so be wary.

Alternatives to SBA 7(a) Loans

Personal loans and business lines of credit are other ways to borrow money for your business. Lenders may offer unsecured personal loans of up to $100,000 in some cases, and funding can happen within a few days of applying. However, some lenders prohibit you from using personal loans for business expenses, so be sure to read the fine print terms when applying.

Business lines of credit, like business credit cards, offer a flexible credit line you can borrow from and pay off as you need cash. A business credit card can also help you build business credit history you can use to apply for other loans in the future.

Methodology

To determine which states have the highest five-year average loan approval amounts, Forbes Advisor examined the SBA 7(a) loan data from the U.S. Small Business Administration for all 50 states and the District of Columbia from 2018 to 2022.

We began by calculating each state’s average annual SBA 7(a) loan amount, utilizing the total amount approved and the number of loans approved. Then, we averaged annual loan amounts for all five years to obtain the five-year average for all 50 states and Washington D.C.