1,523 electrical businesses closed an SBA 7(a) loan in FY2025–FY2026 — a median of $150,000 at 10.25%, with the cheapest quarter under 9.25%. Getting financed is not the unusual move in your industry; getting the cheap end of it is.
- Short answer
- Bankable — licensing is a moat lenders like
- Best fit
- Equipment finance on trucks and bucket units
- Also fits
- Contract financing on commercial awards
- Once bankable
- Line of credit · SBA 7(a)
- What decides it
- Commercial vs residential mix and license depth
- Usual disqualifier
- Undocumented subcontractor labor
Licensing works in your favour
A master electrician's license is a genuine barrier to entry. It limits how quickly a competitor can appear, it caps how fast you can scale, and — counterintuitively — lenders like both facts. A business that cannot triple overnight also cannot collapse overnight.
Depth matters more than the single license. A shop with one master and no journeymen behind them is a key-person risk; a shop with a licensing bench is a business. Say which you are.
Commercial and residential are different files
- Commercial and industrial — larger contracts, real receivables, retainage, longer collection. Contract financing fits well here, and so does factoring.
- Residential service — fast collection, high margin, no receivable risk. The best cash flow in the trade.
- New residential construction — subcontractor position, GC payment terms, the weakest of the three.
- Solar and EV infrastructure — capital-intensive with long payment cycles and, frequently, rebate or incentive receivables that collect slowly. Bring the specifics; lenders treat these differently from standard electrical work.
The subcontractor problem
This is the most common reason a good electrical shop cannot borrow. Crews paid as 1099 when the relationship looks like employment create retroactive payroll tax, workers comp and penalty exposure that no lender can quantify — so they price for the worst case or decline.
If you use subs legitimately, document it: certificates of insurance, their own licensing, signed agreements, and evidence they work for others. That converts an unquantifiable risk into a normal one.
Where electrical files get declined
- Undocumented subcontract labor. The big one.
- Key-person licensing risk with no bench and no succession.
- Cash-basis books on a business carrying retainage and WIP.
- One GC or one builder carrying most of the receivables.
- Incentive and rebate receivables counted at full value when collection is uncertain.
Send us the file either way. If the licensing bench and the mix support bank credit, we will place it. If the labor documentation is the gap, we will tell you exactly what to fix. Either way you get the memo, and you will know our fee before you commit to anything.
Common questions
- Is a electrical business bankable?
- Bankable — licensing is a moat lenders like
- What financing fits a electrical business best?
- Equipment finance on trucks and bucket units
- What do lenders look at for electrical businesses?
- Commercial vs residential mix and license depth
- Why do electrical businesses get declined?
- Undocumented subcontractor labor
What electrical actually paid
1,523 SBA 7(a) loans to this industry in FY2025–FY2026 approvals (1 Oct 2024 – 30 Jun 2026), from the SBA’s own disclosure file.
- 10.25%
- 0.25 points above the 10.00% all-industry median.
- 9.25–11.24%
- A quarter closed cheaper than this, a quarter more expensive.
- $150K
- Half the loans in this industry were smaller.
Medians across loans carrying an initial rate. The spread inside one industry is not a discount anyone is offering — it is which lender read the file. See every lender’s rate.
Industries with the same answer
These businesses look nothing alike, but the product that fits them is the same one — and usually for the same structural reason.