Who's Buying the Trades
SBA Acquisition Lending in America's Skilled-Trade Businesses, FY2020–2025
Lodestar Research · Published July 13, 2026 · Methodology
Lodestar Research analyzed every SBA 7(a) loan approved to finance the acquisition of a skilled-trades business from fiscal year 2020 through fiscal year 2025 — 4,370 change-of-ownership loans totaling $4.42 billion, drawn from the SBA's public loan-level FOIA dataset. This is what the government's own lending record says about who is buying America's trades businesses, what those deals cost to finance, who funds them, and how they perform.
Key findings
- FY2025 set the six-year record for SBA-financed trades acquisitions: 1,003 loans, $1.08 billion approved. The average loan was $1,078,030; the median was $725,000 — the highest median in the series.
- Acquisition volume is up 73% since FY2020, and the growth ran through the steepest rate move in the program's recent history: average initial variable rates on these loans rose from 5.45% (FY2021) to 10.53% (FY2024) — a near-doubling — before easing to 9.65% in FY2025.
- Bought businesses have defaulted less than the trades category as a whole. Among FY2020–2022 loan cohorts, 1.97% of trades acquisition loans have charged off, versus 2.82% for all trades 7(a) loans from the same cohorts.
- One bank dominates the market. Live Oak Bank funded 581 of the 4,370 acquisitions ($705.0M) — 13% of loans and 16% of dollars nationally, twice the loan count of second-place Huntington National Bank.
- Median acquisition loan by trade: electrical $801,250; roofing $957,000; plumbing/HVAC $735,000; landscaping $500,000; janitorial $400,000. Roofing carries the largest average check, $1.40M.
- New Jersey recorded 89 SBA-financed trades acquisitions in six years — roughly 15 a year statewide — at an above-average $1.05M per loan.
- A loan is a financing proxy, not a purchase price. 7(a) acquisition loans typically fund most, not all, of a deal's total project cost. The relationship is stated plainly in the methodology.
The backdrop: a record lending program meets an aging ownership base
SBA 7(a) lending is running at record scale. The program approved 78,078 loans for $37.29 billion in FY2025 (average loan $477,600), up from 42,298 loans and $22.55 billion in FY2020 — an 85% increase in loan count and a 65% increase in dollars over five years. FY2026 has continued at scale: 40,824 loans and $21.84 billion approved through the first nine months (October 2025–June 2026), with average loan size up 12% to roughly $535,000, and January 2026 posting the largest single month in the window examined — 6,595 loans, $4.35 billion. (Program totals are from SBA activity reports; see methodology.)
That boom is arriving at the same moment a large share of trades-business owners — a population that skews well past 55 — reaches retirement age with no successor inside the company. Most commentary about that collision is anecdote. The 7(a) loan-level file is one of the few places the collision leaves a public, verifiable record: every SBA-guaranteed loan made to buy an existing trades business, with amounts, rates, lenders, locations, and outcomes.
This report reads that record. Definitions in one line: "trades" means a fixed list of skilled-trade and adjacent field-service industry codes (printed in the methodology); "acquisition" means the SBA file flags the loan's business as a change of ownership. All figures cover FY2020–FY2025 approvals unless noted.
1. The headline numbers
Buyers financed 4,370 trades-business acquisitions with SBA 7(a) loans between FY2020 and FY2025 — $4.42 billion in approved lending — and FY2025 was the biggest year on every measure.
| Fiscal year | Loans | Dollars approved | Average loan | Median loan |
|---|---|---|---|---|
| 2020 | 581 | $535.8M | $922,139 | $598,000 |
| 2021 | 746 | $717.2M | $961,331 | $648,500 |
| 2022 | 604 | $626.1M | $1,036,672 | $597,000 |
| 2023 | 627 | $625.9M | $998,259 | $627,000 |
| 2024 | 809 | $829.2M | $1,024,944 | $619,000 |
| 2025 | 1,003 | $1,081.3M | $1,078,030 | $725,000 |
| Total | 4,370 | $4,415.4M | $1,010,393 | — |
The shape of the series is as informative as the record. Volume peaked with cheap money in FY2021 (746 loans at an average variable rate of 5.45%), fell roughly 19% into the FY2022–23 rate shock, and then broke out: FY2024 set a then-record 809 loans with variable money averaging 10.5%, and FY2025 added 24% on top of that. Dollars grew 30% year over year in FY2025, and the median loan jumped 17% to $725,000 — the largest median in the file. Demand for trades businesses paused when rates doubled; it did not break.
One definitional note that applies throughout: these are loan approvals. A small share of approved loans are later cancelled or never fully disbursed, so approval counts modestly overstate completed transactions.
2. What each trade sells for — the loan-size proxy
Before the table, the caveat that governs it: a loan amount is not a purchase price. SBA rules generally require a minimum equity injection of about 10% on a complete change of ownership, and the loan typically funds a total project cost that includes the purchase price plus working capital, fees, and sometimes real estate. Loan size therefore tracks deal size closely without equaling it — and it remains the closest thing to a public, transaction-level record of what these businesses trade for. Read the medians as a scale reference, not a price list.
| Trade | Loans | Dollars | Average loan | Median loan |
|---|---|---|---|---|
| Auto repair (general) | 797 | $645.5M | $809,852 | $591,700 |
| Other specialty trades | 716 | $830.4M | $1,159,714 | $654,750 |
| Plumbing / HVAC contractors | 707 | $805.0M | $1,138,681 | $735,000 |
| Landscaping services | 588 | $498.5M | $847,763 | $500,000 |
| Janitorial / cleaning | 312 | $192.3M | $616,296 | $400,000 |
| Electrical contractors | 300 | $396.8M | $1,322,826 | $801,250 |
| Local freight trucking | 270 | $322.7M | $1,195,068 | $982,500 |
| Roofing contractors | 147 | $206.4M | $1,403,822 | $957,000 |
| Painting contractors | 126 | $92.0M | $730,421 | $431,350 |
| Site prep / excavation | 112 | $148.8M | $1,328,379 | $843,750 |
| Flooring | 104 | $108.1M | $1,039,783 | $619,400 |
| Pest control | 72 | $42.7M | $592,560 | $402,500 |
| Finish carpentry | 63 | $70.5M | $1,118,975 | $667,300 |
| Masonry | 38 | $44.7M | $1,175,053 | $895,900 |
| Appliance repair | 18 | $11.2M | $619,778 | $569,050 |
Reading the table:
Plumbing and HVAC are the center of gravity. 707 loans and $805.0M — the most acquisition dollars of any named trade — at a median of $735,000. (The SBA data classifies plumbing and HVAC contractors under a single industry code, so the two cannot be separated here.)
Electrical carries a premium. A median of $801,250 across 300 deals — well above the plumbing/HVAC median — with an average of $1.32M.
Roofing changes hands less often through SBA channels but at the largest checks. Only 147 loans in six years, yet the largest average in the table ($1,403,822) and the second-highest median ($957,000, behind only local freight trucking at $982,500). One hedged interpretation: roofing's well-documented consolidation has run heavily through private-equity buyers writing checks above what the SBA channel typically finances, which would leave the SBA file capturing fewer, larger owner-to-owner deals.
The entry tier is real. Janitorial ($400,000 median), pest control ($402,500), painting ($431,350), and landscaping ($500,000) are where SBA-financed ownership starts at the lowest capital requirement.
Two rows to read with care. "Other specialty trades" is a catch-all industry code and should not be treated as a single market. "Auto repair (general)" leads on count (797 loans) but sits in the scope of this report as an adjacent field-service category, not a construction trade.
3. Who funds the deals
Live Oak Bank is the market. 581 loans and $705.0M across the six years — 13.3% of all SBA-financed trades acquisitions nationally and 16.0% of the dollars. That is 2.0x the loan count and 3.2x the dollars of second-place Huntington National Bank.
| # | Lender | Loans | Dollars | Avg loan |
|---|---|---|---|---|
| 1 | Live Oak Banking Company | 581 | $705.0M | $1,213,340 |
| 2 | The Huntington National Bank | 284 | $223.2M | $785,849 |
| 3 | Celtic Bank Corporation | 104 | $119.3M | $1,146,925 |
| 4 | First Internet Bank of Indiana | 94 | $122.1M | $1,299,288 |
| 5 | Old National Bank | 89 | $93.8M | $1,054,274 |
| 6 | Byline Bank | 74 | $78.6M | $1,061,953 |
| 7 | Manufacturers and Traders Trust Co. (M&T) | 68 | $51.6M | $758,834 |
| 8 | BayFirst National Bank | 62 | $34.6M | $558,350 |
| 9 | Beacon Bank and Trust | 61 | $89.2M | $1,463,075 |
| 10 | First National Bank of Pennsylvania | 47 | $39.0M | $829,223 |
| 11 | The Bancorp Bank, N.A. | 45 | $35.8M | $796,498 |
| 12 | First Bank of the Lake | 43 | $91.9M | $2,136,314 |
| 13 | Customers Bank | 42 | $34.6M | $822,883 |
| 14 | U.S. Bank, N.A. | 42 | $24.9M | $593,938 |
| 15 | Zions Bank | 39 | $29.3M | $751,338 |
| 16 | Dogwood State Bank | 38 | $52.5M | $1,380,729 |
| 17 | Columbia Bank | 38 | $43.1M | $1,134,889 |
| 18 | BMO Bank, N.A. | 36 | $29.2M | $810,975 |
| 19 | BankVista | 30 | $19.7M | $656,140 |
| 20 | Pathward, N.A. | 30 | $52.1M | $1,737,780 |
| 21 | Truliant FCU | 30 | $50.6M | $1,687,290 |
| 22 | First Bank | 30 | $28.9M | $963,693 |
| 23 | Cadence Bank | 30 | $21.2M | $707,613 |
| 24 | Gulf Coast Bank and Trust Company | 29 | $38.3M | $1,322,131 |
| 25 | T Bank, N.A. | 28 | $48.1M | $1,717,796 |
Three structural reads:
A national specialist tier exists, and it is small. The top five lenders wrote 26% of all loans; the top 25 wrote 46% of loans and 49% of dollars. The remaining majority of deals were funded by a long tail of community and regional banks and credit unions — which means most trades acquisitions still close with a local lending relationship, not a national SBA shop.
Lenders specialize by ticket size. Average loan per lender ranges from $558,350 (BayFirst) to $2,136,314 (First Bank of the Lake). Huntington runs a smaller-ticket, higher-count franchise ($785,849 average across 284 loans); Live Oak's book averages $1.21M; Pathward, Truliant, and T Bank average north of $1.68M on lower counts. A buyer's or seller's deal size meaningfully narrows which lenders are the natural fit.
For sellers, this table is the demand map. These are the institutions that have actually underwritten the purchase of businesses like yours, repeatedly, in the last six years.
4. What acquisition debt costs
In FY2025, the average trades acquisition loan carried an initial rate of 9.65% variable or 8.19% fixed, on terms averaging just over 11 years. Rates on these loans nearly doubled between FY2021 and FY2024, then eased.
| Fiscal year | Fixed loans | Fixed avg rate | Variable loans | Variable avg rate |
|---|---|---|---|---|
| 2020 | 124 | 5.48% | 457 | 6.23% |
| 2021 | 134 | 4.97% | 612 | 5.45% |
| 2022 | 85 | 5.68% | 519 | 6.23% |
| 2023 | 107 | 8.14% | 520 | 9.88% |
| 2024 | 105 | 8.59% | 704 | 10.53% |
| 2025 | 134 | 8.19% | 869 | 9.65% |
Rates are averages of initial interest rates at approval for trades change-of-ownership loans specifically. Variable-rate 7(a) loans typically price off the prime rate plus a capped spread.
The structure of this market barely moved while its price doubled. Variable-rate loans dominate throughout — 87% of FY2025 acquisition loans — and average terms held in a narrow band of roughly 10 to 11.5 years across every year and rate environment. The rate cycle ran entirely through price, not tenor: the variable average climbed from a floor of 5.45% in FY2021 to a peak of 10.53% in FY2024 (a 93% increase), then eased 0.9 points to 9.65% in FY2025. Set against Section 1, the demand statement is unambiguous — the second-biggest year of the era to that point (FY2024) was transacted at the most expensive money of the era.
5. The size of the deals
Nearly half of all SBA-financed trades acquisitions — 46% — were loans between $350,000 and $1.5 million. This is a Main Street market, and the file is effectively a census of it.
| Loan size | Loans | Share |
|---|---|---|
| Under $150K | 574 | 13.1% |
| $150K–$350K | 827 | 18.9% |
| $350K–$750K | 1,051 | 24.1% |
| $750K–$1.5M | 973 | 22.3% |
| $1.5M–$3M | 659 | 15.1% |
| $3M–$5M | 286 | 6.5% |
| Over $5M | 0 | 0.0% |
Shares rounded; total 4,370 loans.
The modal band is $350K–$750K, and the distribution is heaviest exactly where the owner-operated segment lives. Two boundary notes matter. At the bottom, 13% of deals financed under $150,000 — SBA-financed ownership of a trades business starts smaller than most commentary assumes. At the top, the zero in the last row is structural, not observed: the 7(a) program caps gross loans at $5 million, so acquisitions larger than that are financed conventionally, by private equity, or with seller paper, and never appear in this dataset. This report describes the Main Street segment comprehensively and the upper middle market not at all.
6. Where the buying is happening
Florida is the largest market for SBA-financed trades acquisitions — 448 loans, 10.3% of the national total — and the top three states (Florida, California, Texas) account for one deal in four.
| # | State | Loans | Dollars | Avg loan |
|---|---|---|---|---|
| 1 | Florida | 448 | $509.4M | $1,137,019 |
| 2 | California | 329 | $350.5M | $1,065,290 |
| 3 | Texas | 312 | $339.0M | $1,086,591 |
| 4 | Colorado | 213 | $228.6M | $1,073,039 |
| 5 | Minnesota | 195 | $160.5M | $823,115 |
| 6 | Pennsylvania | 164 | $160.1M | $976,205 |
| 7 | North Carolina | 161 | $177.7M | $1,103,632 |
| 8 | Illinois | 154 | $165.4M | $1,073,782 |
| 9 | Arizona | 146 | $177.1M | $1,212,877 |
| 10 | Washington | 143 | $141.2M | $987,754 |
| 11 | Wisconsin | 143 | $122.7M | $857,769 |
| 12 | Ohio | 140 | $122.0M | $871,654 |
| 13 | Michigan | 137 | $130.4M | $952,029 |
| 14 | New York | 118 | $105.6M | $894,697 |
| 15 | Missouri | 102 | $94.2M | $923,136 |
| … | ||||
| 20 | New Jersey | 89 | $93.7M | $1,053,089 |
All 50 states plus DC appear in the file; state is the project (business) location. Full table available on request.
Two geographic patterns stand out.
Deal flow follows growth, not population. Florida over-indexes its population share by roughly half again; Colorado (#4) and Minnesota (#5) each write nearly 5% of the nation's deals from a fraction of that population weight; Arizona carries the largest average check in the top 15 ($1,212,877). The heaviest markets skew toward the states people and businesses have been moving to.
The Northeast corridor under-indexes sharply. New York, New Jersey, and Connecticut combined recorded 243 acquisitions — 5.6% of the national total against roughly 10% of the U.S. population, about half their demographic weight. New York is the starkest case: the fourth-largest state by population ranks 14th by deals, with 2.7% of national volume. Whatever is moving trades businesses to new owners in the Northeast, comparatively little of it is running through the SBA channel this file can see — which frames the New Jersey numbers below.
The New Jersey cut
New Jersey recorded 89 SBA-financed trades acquisitions in six fiscal years — about 15 per year statewide — totaling $93.7M at an average loan of $1,053,089.
| New Jersey | National | |
|---|---|---|
| Acquisition loans, FY2020–25 | 89 | 4,370 |
| Dollars approved | $93.7M | $4,415.4M |
| Average loan | $1,053,089 | $1,010,393 |
| Loans per year (avg) | ~15 | ~728 |
| Share of national loans | 2.0% | — |
| Share of national dollars | 2.1% | — |
New Jersey's deals are slightly larger than the national average — consistent with a high-cost, high-density market — but there are strikingly few of them. The state accounts for roughly 2.0% of the nation's SBA-financed trades acquisitions against roughly 2.8% of the U.S. population, and fifteen financed changes of ownership per year is a small number against the stock of established, owner-operated trades businesses in a state this dense.
Two honest readings are possible. The gap may mean fewer trades businesses are changing hands in New Jersey than the state's demographics would predict; it may also mean a larger share of New Jersey deals are financed conventionally or seller-financed and therefore invisible to this dataset. Either way, the count of completed, bank-financed exits this data can see is very small relative to an ownership base that is aging on the same national schedule as everywhere else. For a New Jersey owner, the practical takeaway is that the financed-exit channel exists, is growing nationally, and is — so far — lightly used at home.
New Jersey ranks 20th among states by acquisition count and 17th by dollars — the higher dollar rank reflecting its above-average checks. By trade:
| Trade | Loans | Dollars | Avg loan |
|---|---|---|---|
| Plumbing / HVAC contractors | 16 | $24.5M | $1,532,356 |
| Auto repair (general) | 15 | $7.9M | $526,800 |
| Landscaping services | 14 | $7.9M | $563,586 |
| Janitorial / cleaning | 11 | $4.4M | $396,455 |
| Electrical contractors | 6 | $8.1M | $1,352,750 |
| Site prep / excavation | 6 | $13.8M | $2,300,750 |
| Local freight trucking | 6 | $7.6M | $1,266,667 |
| Painting contractors | 5 | $5.8M | $1,168,100 |
| Other specialty trades | 4 | $7.5M | $1,871,775 |
| Roofing contractors | 2 | $4.0M | $1,977,000 |
| Pest control | 2 | $0.9M | $442,500 |
| Flooring | 1 | $1.1M | $1,073,000 |
| Masonry | 1 | $0.3M | $293,400 |
Most cells are single digits — read the averages as indicative, not statistics. Finish carpentry and appliance repair recorded zero NJ acquisitions in the file.
Plumbing/HVAC is the center of New Jersey's market: 16 loans (18% of the state's deals) carrying $24.5M (26% of its dollars), at an average of $1,532,356 — roughly 35% above the trade's national average. Site prep and excavation wrote the state's largest checks, averaging $2.3M across six deals. And across the core construction trades — plumbing/HVAC, electrical, and roofing combined — New Jersey recorded 24 SBA-financed acquisitions in six years: four financed exits a year, statewide.
7. Do bought businesses fail?
So far, less often than the category they belong to. Among FY2020–2022 approval cohorts — the vintages old enough to have meaningful seasoning — 1.97% of trades acquisition loans had been charged off as of the March 2026 data vintage, versus 2.82% of all trades 7(a) loans from the same cohorts. That is about 30% lower in relative terms, 0.85 percentage points in absolute terms.
This result deserves its caveats stated as plainly as the number:
- These cohorts are young. These are loans with 10-plus-year terms, three to six years into their lives. Charge-offs accumulate over a loan's full term; the gap could narrow or widen as the vintages season.
- Pandemic-era support flattered every early cohort. FY2020–21 borrowers benefited from CARES Act Section 1112 payments (the SBA made months of principal and interest payments on borrowers' behalf) and fee relief, which suppressed early defaults across the board. The comparison is between two groups that both received that support, but absolute rates from these cohorts should not be extrapolated forward.
- Selection, not just safety. An acquisition loan underwrites an existing business's historical cash flow; the all-trades book includes startups and expansion credit. Some or all of the gap may reflect what lenders chose to finance rather than an inherent property of acquisitions.
The claim the data supports, exactly: among FY2020–2022 trades 7(a) cohorts, loans that financed a change of ownership have charged off at a lower rate to date than the trades book overall. It is a counterintuitive and encouraging early read on the riskiness of buying — not a guarantee about any future vintage.
8. The silver-tsunami gauge
If a retirement-driven wave of trades-business exits were flowing through the SBA channel, the cleanest tell would be acquisitions taking a rising share of all trades 7(a) lending. Here is that gauge:
| Fiscal year | Acquisition loans | All trades 7(a) loans* | Acquisition share |
|---|---|---|---|
| 2020 | 581 | 5,459 | 10.6% |
| 2021 | 746 | 6,153 | 12.1% |
| 2022 | 604 | 6,106 | 9.9% |
| 2023 | 627 | 7,707 | 8.1% |
| 2024 | 809 | 9,358 | 8.6% |
| 2025 | 1,003 | 9,966 | 10.1% |
| Total | 4,370 | 44,749 | 9.8% |
*All-trades totals derived from acquisition counts and computed shares; they reconcile exactly to the 44,749-loan universe.
The honest answer: the gauge is not rising. Acquisition share has cycled between 8.1% and 12.1% for six years, and FY2025's 10.1% sits near the period average of 9.8%. What actually happened is that the entire trades-lending tide came in — all trades 7(a) lending grew 83% (5,459 to 9,966 loans) — and acquisitions rode it, growing 73%. The record is real; it is a record of absolute volume, not of acquisitions claiming a growing slice of trades credit.
The cycle in the share is worth watching on its own. It has moved inversely with the cost of money across these six points — peaking in FY2021 at the cheapest rates in the file, troughing in FY2023 during the rate shock, and recovering in FY2025 as rates eased (acquisitions grew 24% in FY2025 against 6.5% for the trades book overall). Six observations are a pattern, not proof; but they suggest acquisition demand is the most rate-sensitive slice of trades lending, which is what you would expect from leveraged buyers.
What would confirm the succession wave in this data: the share breaking sustainably above its 12.1% high-water mark while absolute volume keeps climbing. As of FY2025 it has not. The wave, so far, shows up in this file as record deal counts at record prices — not yet as a regime change. Lodestar Research will re-run this gauge on each quarterly release of the SBA file.
Methodology, in brief
Source: SBA 7(a) FOIA loan-level dataset (data.sba.gov), March 2026 vintage, FY2020–FY2025 approvals; program-level totals from SBA activity reports through June 2026. Trades defined by a fixed list of industry codes; acquisitions identified by the file's change-of-ownership flag; 44,749 trades loans, of which 4,370 are acquisitions. All published tables reconcile to the same 4,370-loan universe. Full definitions, field choices, and limitations — including the loan-size-versus-purchase-price relationship — are on the methodology page.
Cite as: Lodestar Research analysis of SBA 7(a) FOIA data, 2026.
Corrections or questions about the data: hello@withlodestar.com.
Lodestar Research publishes market analysis for general information. Nothing on this page is a valuation of any specific business, legal, tax, or lending advice, or an offer to buy or sell securities. Figures are drawn from public SBA data and are subject to the limitations described in the methodology.
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