SBA 7(a) Q&A
Short answer
It depends. A high customer concentration is a significant risk factor, and the lender will scrutinize the stability and mitigating factors very closely.
SBA lenders evaluate customer concentration as a key risk. If a single client accounts for a very large percentage of revenue (e.g., over 25-30%), the business is vulnerable if that client leaves. Strong contracts, diverse service offerings, or a plan to reduce reliance are crucial.
If you are acquiring a marketing agency where one client generates 60% of its $1,000,000 annual revenue, the lender will likely require a multi-year contract with that client, a clear strategy to diversify the client base, and potentially higher cash reserves.
Insider move
Lenders worry about the business's long-term viability if reliant on a single customer. They seek evidence of customer loyalty, diversification plans, or contractual protections to mitigate this substantial risk.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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