SBA loan basics
Short answer
High customer concentration is a significant risk factor that lenders will carefully scrutinize, as the loss of that one customer could severely impact the business's ability to repay the loan.
Lenders assess various business risks, including customer concentration. A business heavily reliant on a single customer presents a higher risk of cash flow disruption. Lenders will look for mitigating factors such as long-term contracts, diversification strategies, a stable customer relationship history, and the buyer's plan to reduce this dependency.
A manufacturing company generates 60% of its revenue from a single government contract. While the contract is lucrative, the lender would view this as very high risk, as non-renewal could devastate the business. They would seek explanations, historical stability of the relationship, and a concrete plan for customer diversification post-acquisition.
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
SBA Form 1919 - Borrower Information Form
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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