SBA 7(a) Q&A
Short answer
Yes, but businesses with high customer concentration face increased scrutiny during underwriting due to higher risk.
While not explicitly ineligible, a business heavily reliant on a single customer presents a concentration risk. Lenders must thoroughly assess the stability and relationship with that key customer, the potential impact of losing them, and any diversification strategies. The SBA expects lenders to apply prudent lending standards and mitigate such risks.
You wish to buy a manufacturing business generating 60% of its $2,000,000 annual revenue from one large corporate client. The lender will review the contract terms, client history, and your plan for customer retention and diversification before approving the $1,500,000 acquisition loan.
Lenders worry about the stability and longevity of revenue from a highly concentrated customer base. They will evaluate the strength of the relationship, contract terms, and the buyer's mitigation strategy to ensure the business's long-term viability and ability to service the debt.
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.
More on eligibility & underwriting
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