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Stories from Business Owners Working in the SBA’s Most Funded Businesses

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Loans from the Small Business Administration (SBA) are valued for a few solid reasons. They offer low interest rates (typically 6 to 13%) and long-term lengths. They also come in a variety of types aimed at small business needs like inventory, real estate and new equipment.

SBA loans may be easier to get for lenders that may be considered too risky because the SBA partially guarantees the loans. The right amount of financing at the right time can make a big difference to the health of a small business.

We looked at data from the SBA from 2010 to 2018 to see which industries received the most SBA 7a loans (the SBA’s most popular loan). Then we spoke to business owners in some of those industries about how an SBA loan impacted their small business.

10 businesses receiving the highest number of SBA 7a loans from 2010 to 2018

Type of business Number of 7a SBA loans received  2010-2018
Full-service restaurants 24,828
Limited-service restaurants 16,707
Dentist offices 9,878
General freight, long distance 7,843
Hotels and motels 7,476
Offices of physicians (except mental health specialists) 7,475
All other specialty trade contractors 6,762
Landscaping services 6,751
Beauty salons 6,728
General automotive repair 6,720


SBA business owner stories

Three business owners in three of the SBA’s most-funded industries shared their experiences with how the funding from the SBA affected their small business.

Kelli Kerns and Timothy and Becky Cron, owners of the Sawtooth Hotel in Stanley, Idaho

The new owners of the Sawtooth Hotel in Stanley, Idaho, turned to the SBA at a time when the only thing they could get from bank loan officers was helpless looks.

Timothy and Becky Cron and Becky’s sister, Kelli Kerns, purchased the shuttered and somewhat dilapidated hotel in 2005. They were in the middle of a five-year rehab project when they ran out of funds at about the same time the economy crashed in 2008.

“We had this half renovated old hotel in a tiny town,” said Timothy Cron, who was also serving as general contractor with the help of friends.

Cron and his wife had already secured a loan to purchase the Stanley Baking Company in 2003, and the three partners had qualified for a bank loan to buy the Sawtooth. During a time when very few people were qualifying for bank loans after the market crash, loan officers at Zions Bank in Burley, Idaho and D.L. Evans Bank in Boise worked with the SBA to get the money the partners needed to bring the hotel back to life.

The log cabin-like Sawtooth originally opened in 1931, featuring a restaurant in addition to rooms. At some point in its history, the little town of Stanley caught the attention of the Harrah family, who, according to Kerns, hoped to establish legalized gambling there.

The Harrahs’ gambling plan didn’t work out, but the Sawtooth became a popular fixture in Stanley. From the 1950s to the late 1990s, it was owned by two generations of the Cole family. They sold the hotel in 1997 to nearby Albertson College, which used it to house its creative writing program for a time.

The Crons, who had been living in Stanley since opening their bakery, saw the Sawtooth as a good investment in addition to a major challenge. “It was the ultimate fixer-upper,” said Timothy Cron. They convinced Kerns to buy in after purchasing the property. Although the town itself only has 63 residents as of the 2010 census, there is a steady influx of vacationers headed into the Sawtooth mountains or to enjoy the Sawtooth National Forest Preserve.

The purchase might have been personally appealing for the Crons for another reason – They had been living in a tent their first year running the bakery (Stanley has a severe housing shortage) and owning the hotel provided the opportunity to move indoors.

Kerns also found the idea of running the Sawtooth’s restaurant particularly appealing. She and her sister had worked for years as waitresses at a restaurant in nearby Ketchum, Idaho. She had quickly worked her way up to the position of head waitress for the dinner shift and felt confident she could run a dinner restaurant at the Sawtooth.

“I enjoy that kind of work,” she said

The restaurant wasn’t ready until a year after the hotel opened, as it happened, but it was almost immediately a success. Kerns says she now has trouble coping with 100 diners per night, on average (with a high of 186), given that they can handle a maximum of 40 inside and 40 outside at any given time.

“Right now, we’re trying to figure out how to manage success,” Kerns said. “Of course, that’s a good problem to have.”

Especially good considering how close the partners came to disaster in 2008 before applying to the SBA.

“I don’t know what other route we could have taken, to be honest,” said Timothy Cron. He added that he is more than happy with his SBA experience, but that his bankers know more than he does about how the agency’s loan process works. “It worked for us, but I don’t know if it would work for everyone else.”

Sue Lamond, owner of Salvation Café in Newport, R.I.

Growing up in Newport, R.I., the last thing Sue Lamond imagined she might do with her life was open a restaurant. Nonetheless, after a couple of assists from the SBA, she is now celebrating her 25th year as the owner of Newport’s Salvation Café.

Lamond had originally imagined pursuing a career in theater and film and went to New York City in her early 20s to try her luck. On a trip back to Newport, however, she noticed the city had nothing like the new-wave Brooklyn-style restaurants she had discovered.

“Back then, in Newport, it was either nachos and margaritas or chowder and clam cakes,” she said with a laugh.

So, she decided to create one herself — something “sophisticated, yet casual…kind of a rock ‘n’ roll restaurant.”

With an $8,000 inheritance, she opened the eight-table Salvation Café in 1993, decorated by her mother with quirky items from the Salvation Army store next door. She created a somewhat exotic, globally influenced menu featuring dishes like sake-steamed little neck clams.

At first, she thought of it as a diversion to keep her busy before heading back to New York. Little by little, however, as the café’s popularity grew, she realized it was a fulfilling creative outlet. Eight years passed and as she expanded, she got creative by adding additional tables under a large “circus tent” in the cafe’s back yard.

As a result, Lamond decided to apply for a business loan in 2001 to purchase the Salvation Café property, in spite of the fact that she had no collateral and, according to her, “no business sense at all.”

“I was very creative and I had a lot of ideas, but everything about business seemed so foreign to me and so weird,” she said. “Fortunately, they had the SCORE (small business mentorship) program in Newport and I had a retired businessman who acted as a mentor, and he really helped a lot by demystifying it for me.”

He helped her apply for the SBA loan through Coastway Credit Union (now Coastway Commercial Bank) that would allow her to purchase the building she had been renting. She didn’t expect her application to get approved because she had no collateral, and 17 years later, she’s still somewhat amazed that it was.

“I don’t know why they did it,” she said. “The only collateral I had was the idea of who I was going to be in the future. But they did. And I think that’s the only way I could have gotten the money I needed.”

Since it worked for her once, Lamond applied for another SBA loan in 2011 to build a permanent building to replace the backyard tent she had been obliged to give up when building code requirements changed. Once again, the SBA came through with the money she needed.

Lamond said she’s aware the SBA has a reputation for being somewhat difficult when it comes to approving loans, but she thinks borrowers can succeed if their concept is strong enough and they’re willing to make the necessary effort.

“In order to get a loan for a large amount of money, you have to have skin in the game and you have to be committed,” she said. “You have to be prepared to meet them more than halfway. They’re not going to do 90 percent while you do 10.”

Lamond’s only critique of SBA loans is the fees.

“I think that’s something they should look into,” she said. “At this point, now that I have more assets, I’d probably go to a regular bank for a loan because the fees at the SBA are so much higher. On the other hand, when I didn’t have anything in the bank, they were there for me. I feel really lucky.”

Frederick Toussaint, co-owner, Margaret’s Hair Gallery, Sacramento, Calif.

After working as an independent contractor in other people’s salons since the early 1990s, Margaret Rudolph and her husband and business partner, Frederick Toussaint, decided it was time to open her own shop.

“She was ready,” Toussaint said, noting that Rudolph had learned the salon business and had developed a following as a specialist in hair extensions. “It made sense to open our own shop instead of having her working in different places.”

In 2005, they purchased a failing salon business (and took over the lease) that had all the necessary equipment for a full-service salon in Sacramento. Capitalizing on Rudolph’s experience as a hair extension specialist, they also decided to launch a hair extension e-commerce website with a business partner that same year.

The partnership didn’t work out, but Rudolph and Toussaint launched their own website in 2009,, offering Indian temple hair (hair from women who shave their heads in Indian temples.) In 2011, six years after launching, they decided to leave their leased space and buy their own building with the help of the SBA.

“Our first place was too small and expensive, and the landlord wouldn’t cooperate with us,” Toussaint said, noting that the landlord did provide them with the name of a man who specialized in helping people secure financing from the SBA.

The couple worked with Seacoast Commerce Bank in San Diego, an SBA-preferred lender, and secured the money they needed with little difficulty within three months.

“The guy we worked with said we met the criteria, so it was worth a try,” Toussaint said. “We ran into a few obstacles, but it wasn’t that bad. It was like buying a house.”

In fact, Toussaint said he found the process so painless that he applied for (and received) two smaller SBA loans through Superior Financial Group and Sam’s Club to expand the business.

“I think it’s a lot easier than going through a conventional bank,” Toussaint said. “It’s a good place to do business.”

Alternatives to SBA loans

Whether you get approved for a loan with the SBA mostly depends on your personal credit score, how long you’ve been in business and the yearly revenue of your business. Here is a look at SBA loan alternatives:

  • Traditional lender (bank or credit union) — If you have good credit (a 680 score or above), have been in business for at least two years and have business revenue of $100,000 or more, you stand a good shot of getting a loan from a traditional bank or credit union. Although SBA loan interest rates are good, bank loan interest rates tend to be even better, at about 5 to 10 percent APR. So if you have those strong business qualities and don’t need the loan right away, consider going to a bank first.
  • USDA rural development department loans — Like the SBA, these are government-backed loans with favorable interest rates and long repayment terms, but they’re specifically meant for business in rural areas. The main requirement is that the project is located in an area with fewer than 50,000 people.
  • Loans from alternative lenders — You may have to consider an alternative lender if your credit score is under 680, you’re a newer business and/or your revenues are low. Online lenders typically offer small business loans quickly and with a lot less effort, but almost always with a higher interest rate.
  • Microloans — These small business loans, of usually no more than $50,000, are offered by traditional banks and online lenders, nonprofit lenders and the SBA. A microloan might be a good option for you if your business only needs a small amount of cash (and can pay it back over a relatively short time period).

The bottom line

Although the application and approval process for an SBA loan can take a lot of hard work — including paperwork, documentation and providing a detailed business plan — the results can be worth it. Knowing your industry well, coupled with a solid financial plan, can also make the difference between whether you’re approved for a loan or not. Simply belonging to one of the 10 industries that receive the most SBA loans won’t guarantee you’ll be approved, but it is a sign that the SBA knows these industries well and that many business owners in these industries are turning to the SBA for their funding needs.


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