Methodology
Lodestar Research — "Who's Buying the Trades" and related statistics pages
This page fully specifies how the figures were produced, so any reader with the public file can reproduce them.
Sources
Loan-level data: SBA 7(a) FOIA loan-level dataset, published by the U.S. Small Business Administration at data.sba.gov ("FOIA – 7(a) (FY2020–Present)"). Analysis vintage: the March 31, 2026 release. The file contains every 7(a) loan approval with amount, industry code, business age category, lender, location, rate, term, and current status. The 7(a) FOIA file excludes the Paycheck Protection Program, which was reported separately.
Program-level totals (used only for market context, never mixed into loan-level tables): SBA Monthly/Yearly Activity Reports, retrieved July 2026, covering FY2020 through June 2026.
Universe and definitions
- Period: loan approvals in federal fiscal years 2020 through 2025 (October 1, 2019 – September 30, 2025). FY2025 is complete in the analysis vintage. No FY2026 loan-level data appears in any table.
- Trades: loans whose industry code appears on the fixed list below — skilled construction trades plus adjacent route- and field-service categories. This yields 44,749 loans.
- Acquisition: a trades loan whose business-age field (
BusinessAge) is coded "Change of Ownership." This yields 4,370 loans, the universe for every acquisition table. - Internal consistency: every published table (by year, by trade, by lender, by rate type, by size band) reconciles to the same 4,370-loan universe.
Industry codes included
The following table is the complete industry-code filter, verified as an exact match against the analysis script (analyze_trades.py); a loan is in scope when the first six digits of its NAICS code appear here.
| Report label | NAICS |
|---|---|
| Plumbing / HVAC contractors | 238220 |
| Electrical contractors | 238210 |
| Roofing contractors | 238160 |
| Masonry | 238140 |
| Site prep / excavation | 238910 |
| Painting contractors | 238320 |
| Flooring | 238330 |
| Finish carpentry | 238350 |
| Other specialty trades | 238990 |
| Landscaping services | 561730 |
| Janitorial / cleaning | 561720 |
| Pest control | 561710 |
| Local freight trucking | 484110 |
| Auto repair (general) | 811111 |
| Appliance repair | 811412 |
Note that NAICS 238220 combines plumbing, heating, and air-conditioning contractors in a single code; plumbing and HVAC cannot be separated in this data. "Other specialty trades" (238990) is a catch-all classification and is presented for completeness, not as a single coherent market.
Measures
- Loans / dollars: counts of approvals and sums of gross approved amounts (
GrossApproval) byApprovalFY. - Average and median loan: computed on gross approval amounts within each grouping.
- Rates: averages of initial interest rates at approval, split by the file's fixed/variable indicator. These are starting rates, not lifetime effective rates; variable 7(a) loans typically reprice off the prime rate plus a capped spread.
- Terms: average stated term in months.
- Charge-off rate: the share of loans — by count, not dollars — in the FY2020–2022 approval cohorts with a charge-off date recorded (
ChargeoffDatenon-null) as of the March 2026 vintage. The all-trades comparison figure is computed identically over the full trades book from the same cohorts, which includes the acquisition loans within it — a conservative comparison; excluding acquisitions from the comparator would widen the gap slightly. Later cohorts are excluded because they are too young to have meaningful charge-off experience. - Geography: loans grouped by state using the file's project state field (
ProjectState) — the location of the business being acquired, which for these loans is typically also the borrower's state. - Derived series: the "all trades 7(a) loans per year" column in the acquisition-share table is derived from acquisition counts and computed shares; it reconciles exactly to the 44,749-loan trades universe. Percentages, growth rates, and per-lender averages throughout are arithmetic on the published figures. Nothing is modeled or estimated.
Limitations — read before citing
- SBA-financed deals only. This data captures acquisitions financed with a 7(a) loan. All-cash purchases, conventionally financed deals, seller-financed transfers, and private-equity transactions are invisible to it. It is a census of the SBA channel, not of the whole M&A market.
- Loan size is not purchase price. SBA rules generally require a minimum equity injection of roughly 10% on a complete change of ownership, and loan proceeds fund a total project cost that can include working capital, fees, and real estate alongside the business purchase. Loan size tracks deal size; it does not equal it. No table in this report should be read as a price list.
- Approvals are not closings. A share of approved loans are subsequently cancelled or not fully disbursed; approval counts modestly overstate completed transactions.
- The $5M cap truncates the top. The 7(a) program caps gross loans at $5 million. Zero loans above $5M is a property of the program, not the market; larger acquisitions are financed elsewhere and do not appear here.
- FY2020–21 include pandemic-era distortions. Fee waivers, guarantee changes, and CARES Act Section 1112 payments (the SBA paid months of principal and interest on borrowers' behalf) affected both loan demand and early loan performance in those cohorts. Year-over-year comparisons that span this period, and all cohort charge-off figures, should be read with that in mind.
- Charge-off cohorts are young. FY2020–2022 loans are three to six years into terms averaging 10-plus years. Charge-off gaps observed to date may narrow or widen as vintages season, and acquisition-versus-category comparisons partly reflect lender selection (acquisitions underwrite existing cash flow; the broader book includes startups).
- The acquisition flag is lender-coded. "Change of Ownership" depends on how the lender classified the business at application. Partner buyouts and partial changes of ownership may be coded otherwise, so acquisition counts are, if anything, conservative.
- Classification granularity. See the NAICS notes above (plumbing/HVAC combined; 238990 catch-all).
Reproduction
The dataset is public. The definitions above — the industry-code list, the change-of-ownership flag, the fiscal-year window, and the field choices — fully specify every table. The analysis script is available verbatim at /research/analyze_trades.py; the input file is the public SBA 7(a) FOIA dataset at data.sba.gov.
Citation
Cite as: Lodestar Research analysis of SBA 7(a) FOIA data, 2026.
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