SBA loans in Alabama: who lends, what gets bought, how it performs
Since FY2018, SBA lenders have approved 476 7(a) loans to buy an existing business in Alabama, totaling $568M. The median loan was $787,850, 22% higher than the $645,250 national median for SBA-financed acquisitions.
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SBA lenders in Alabama
The lenders that made the most SBA 7(a) acquisition loans in Alabama, FY2018 to FY2026.
| # | Lender | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Live Oak Banking Company | 58 | 12.2% | $88.6M | |
| 2 | The Huntington National Bank | 29 | 6.1% | $23.5M | |
| 3 | Pinnacle Bank | 20 | 4.2% | $27.5M | |
| 4 | United Midwest Savings Bank National Association | 20 | 4.2% | $22.1M | |
| 5 | United Community Bank | 18 | 3.8% | $20.2M | |
| 6 | ServisFirst Bank | 15 | 3.2% | $14.7M | |
| 7 | BankFirst Financial Services | 15 | 3.2% | $3.2M | |
| 8 | BankPlus | 13 | 2.7% | $18.4M | |
| 9 | Renasant Bank | 12 | 2.5% | $8.9M | |
| 10 | GBank | 11 | 2.3% | $22.9M |
What this tells a buyer
- Deal size band. Half of Alabama acquisition loans fell between $331,750 and $1,569,250. The nationwide band is $283,000 to $1,465,000.
- Share of national volume. Alabama accounts for 1.0% of all SBA acquisition loans and ranks number 28 of 54 states and territories by count.
- Industry concentration. Hotels (except Casino Hotels) and Motels is the most financed business type here (38 loans, 8% of the state). The top three industries together are 20%.
- Lender concentration. Live Oak Banking Company made 12% of the state's acquisition loans. No single lender dominates, so there are several lenders with local acquisition experience.
- Franchise resales. 25% of acquisition loans in Alabama involved a franchised brand; the most frequent is The UPS Store (6 loans).
Alabama acquisition loans by year
| Fiscal year | Loans | Total approved | Median loan | |
|---|---|---|---|---|
| FY2018 | 34 | $31.6M | $616,450 | |
| FY2019 | 46 | $43.4M | $493,000 | |
| FY2020 | 50 | $48.8M | $576,050 | |
| FY2021 | 43 | $72.1M | $1,240,000 | |
| FY2022 | 54 | $52.3M | $713,900 | |
| FY2023 | 72 | $94.1M | $874,250 | |
| FY2024 | 55 | $70.7M | $989,000 | |
| FY2025 | 64 | $78.6M | $800,500 | |
| FY2026 | 58 | $76.2M | $777,500 |
How often do these acquisition loans fail?
Of the 173 Alabama acquisition loans approved from FY2018 to FY2021 (the seasoned cohort, every loan at least about five years old), 6 have been charged off by the SBA, a rate of 3.5% by loan count and 3.2% by dollars. 91 have already been paid in full.
For comparison, the charge-off rate across all SBA 7(a) acquisition loans in the same cohort is 3.5%, so Alabama is in line with the acquisition-loan average. Non-acquisition 7(a) loans (every other stated purpose) approved FY2018 to FY2021 charged off at 6.2%.
"Charged off" is the SBA's final loss action on a defaulted loan after collection efforts. It lags default by a year or more, which is why only older cohorts are measured. It is not the same as a delinquency rate, and loans still outstanding can still fail. See charge-off in the glossary.
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Top industries in Alabama
| # | Industry | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Hotels (except Casino Hotels) and Motels | 38 | 8.0% | $96.7M | |
| 2 | Limited-Service Restaurants | 31 | 6.5% | $23.4M | |
| 3 | Broilers and Other Meat Type Chicken Production | 24 | 5.0% | $29.5M | |
| 4 | Insurance Agencies and Brokerages | 24 | 5.0% | $27.7M | |
| 5 | Full-Service Restaurants | 23 | 4.8% | $10.7M | |
| 6 | Pharmacies and Drug Retailers | 15 | 3.2% | $22.7M | |
| 7 | General Automotive Repair | 11 | 2.3% | $6.6M | |
| 8 | Plumbing, Heating, and Air-Conditioning Contractors | 10 | 2.1% | $9.3M | |
| 9 | All Other Specialty Trade Contractors | 8 | 1.7% | $12.7M | |
| 10 | Clothing and Clothing Accessories Retailers | 7 | 1.5% | $3.1M |
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Franchise brands bought in Alabama
| # | Franchise | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | The UPS Store | 6 | 1.3% | $3.1M | |
| 2 | Motel 6 | 5 | 1.1% | $6.7M | |
| 3 | Subway | 5 | 1.1% | $880K | |
| 4 | Best Western | 3 | 0.6% | $13.2M | |
| 5 | Primrose Schools | 3 | 0.6% | $6.1M | |
| 6 | Super 8 | 3 | 0.6% | $5.6M | |
| 7 | Days Inn | 3 | 0.6% | $5.4M | |
| 8 | Zaxby's | 3 | 0.6% | $4.4M | |
| 9 | Outdoor Lighting Perspectives | 3 | 0.6% | $1.9M | |
| 10 | Anytime Fitness | 3 | 0.6% | $808K | |
| 11 | Quality Inn | 2 | 0.4% | $6.4M | |
| 12 | Travelodge | 2 | 0.4% | $4.1M | |
| 13 | Domino's Pizza | 2 | 0.4% | $2.6M | |
| 14 | Econo Lodge | 2 | 0.4% | $2.6M | |
| 15 | Batteries Plus | 2 | 0.4% | $2.6M |
Acquisitions by industry in Alabama
The 8 industries with the most acquisition loans in Alabama (minimum ten). Charge-off rates appear where at least 20 loans are old enough to measure.
| Industry | Loans | Median loan | Charge-off |
|---|---|---|---|
| Hotels and Motels | 38 | $2,220,500 | n/a |
| Limited-Service Restaurants | 31 | $495,000 | n/a |
| Insurance Agencies and Brokerages | 24 | $1,017,500 | n/a |
| Broilers and Other Meat Type Chicken Production | 24 | $1,017,000 | n/a |
| Full-Service Restaurants | 23 | $324,200 | n/a |
| Pharmacies and Drug Retailers | 15 | $950,000 | n/a |
| General Automotive Repair | 11 | $426,600 | n/a |
| Plumbing, Heating, and Air-Conditioning Contractors | 10 | $875,000 | n/a |
Questions buyers ask
How much do buyers borrow to buy a business in Alabama?
The median SBA 7(a) acquisition loan in Alabama was $787,850 across 476 loans (FY2018 to FY2026), 22% higher than the $645,250 national median. The middle half of loans ran from $331,750 to $1,569,250. A loan is not the purchase price: it is net of the buyer's equity injection and usually includes some working capital.
Which banks make the most SBA acquisition loans in Alabama?
Live Oak Banking Company (58), The Huntington National Bank (29), Pinnacle Bank (20), United Midwest Savings Bank National Association (20), United Community Bank (18). Live Oak Banking Company alone accounts for 12% of Alabama acquisition loans. See each lender page for industries and states served.
What kinds of businesses are bought with SBA loans in Alabama?
Hotels (except Casino Hotels) and Motels (38), Limited-Service Restaurants (31), Broilers and Other Meat Type Chicken Production (24), Insurance Agencies and Brokerages (24), Full-Service Restaurants (23). The top three industries make up 20% of the state's acquisition loans.
How often do SBA acquisition loans fail in Alabama?
In the seasoned cohort (FY2018 to FY2021), among 173 Alabama acquisition loans: 3.5% charged off, in line with the 3.5% national acquisition average.
How does Alabama compare with other states?
Alabama ranks number 28 of 54 states and territories by acquisition loan count, with 1.0% of national volume (476 of 48,902 loans) and $568M approved. Browse the full state ranking.
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Related
- Hotels (except Casino Hotels) and Motels nationally
- Limited-Service Restaurants nationally
- Broilers and Other Meat Type Chicken Production nationally
- Live Oak Banking Company
- The Huntington National Bank
- Pinnacle Bank
- All states
- Buyer's guide to the data
State is the project state recorded by the lender (where the acquired business operates), not the borrower's mailing state.