Metal fabrication business loans
All Other Miscellaneous Fabricated Metal Product Manufacturing · NAICS 332999 · Program that usually fits: 7(a) or 504
Most SBA loans to metal fabricators pay for machines or the building that houses them. A shop might finance a fiber laser, a press brake and a CNC plasma table, buy out a retiring owner, or move into its own building. Because the equipment holds value and the work is tied to specific customers, lenders spend most of their time on two things: how concentrated the customer list is, and whether the shop's backlog and margins can carry new debt payments.
Who qualifies
Job shops, custom fabricators and makers of small metal products such as brackets, fittings, racks and enclosures. Lenders want an owner or key employee with real shop-floor and estimating experience, and certifications such as AWS welding or ISO 9001 help when the shop serves industrial or aerospace buyers. Buyers of an existing shop should plan on at least 10% equity, and a seller note is common. Companies doing defense work must still meet SBA size standards with affiliates counted.
Which SBA program fits
504 for the building and big machines
A 504 loan pairs a bank first lien with a CDC debenture at a fixed rate near 6.57% for 25 years. Manufacturers can get a debenture of up to $5.5 million, which suits a building purchase or a major laser line.
7(a) for shop purchases
A standard 7(a) loan covers buying an existing fabrication business, including goodwill, inventory and working capital, on a 10-year term. It can also refinance expensive equipment debt.
Express for single machines
SBA Express loans up to $500,000 fit a single press brake, welder fleet or saw upgrade when speed matters more than the lowest rate. Expect a slightly higher rate than standard 7(a).
What borrowers use the money for
- CNC machining centers, fiber lasers, press brakes and plasma tables
- Buying an established job shop from a retiring owner
- Purchasing or expanding a shop building with crane bays and heavy power
- Raw steel and aluminum inventory to take on a large order
- Refinancing high-rate equipment leases into one longer-term loan
Typical loan amounts, down payment and terms
Fabrication loans run larger than most small-business loans. Single machines often cost $150,000 to $600,000, and shop acquisitions commonly fall between $750,000 and $3 million. Equipment loans run up to 10 years, or the useful life of the machine, and real estate up to 25 years. Expect 10% down on most deals, and 15% to 20% when the building is special purpose or the shop is new.
What lenders look at for a metal fabrication shop
Customer concentration comes first. If one OEM or contractor is more than a quarter of sales, the lender will ask about contracts and what happens if that buyer leaves. They also review the backlog, quoting win rate and gross margin by job, and how steel price swings are passed through. Equipment is appraised at orderly liquidation value, which is often well below cost. Lenders also check skilled labor depth, because a shop that depends on one programmer or welder is a key-person risk.
Example: a $750,000 loan
At today's maximum variable 7(a) rate of 10.00% over 10 years, the payment would be about $9,911 a month. Most well-qualified borrowers get a lower rate. Try your own numbers.
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Answer four questions and see SBA lenders that fit your state, loan size and industry, with your maximum rate. Compare at least two quotes before you sign. Rates move monthly: check current SBA loan rates and the 504 rate.
Today's rate caps
These are the SBA's maximum 7(a) rates with prime at 7.00%. See current SBA loan rates and SBA 504 rates for the full picture.
| Loan amount | Maximum spread | Maximum variable rate today |
|---|---|---|
| $50,000 or less | Prime + 6.5 | 13.50% |
| $50,001 to $250,000 | Prime + 6.0 | 13.00% |
| $250,001 to $350,000 | Prime + 4.5 | 11.50% |
| Over $350,000 | Prime + 3.0 | 10.00% |
Related industries and lenders
Related industries
SBA lenders active nationwide
Questions about metal fabrication shops loans
Can I get an SBA loan for a CNC machine or laser cutter?
Yes. Production equipment is one of the most common uses of 7(a) and 504 loans in fabrication. Express works for machines under $500,000. For larger purchases, a 504 loan offers a long fixed rate, and manufacturers qualify for a debenture of up to $5.5 million.
How much down payment does a metal fabrication loan need?
Usually 10% for an established shop buying equipment or a building through 504 or 7(a). Start-ups and special-purpose buildings often need 15% to 20%. On a business purchase, the SBA generally requires at least 10% equity, and part of it can come from a seller note under certain conditions.
What are SBA rates for manufacturing equipment loans?
With prime at 7.00%, 7(a) loans over $350,000 are capped at 10.00% variable, and $250,001 to $350,000 at 11.50%. The 504 debenture portion carries a fixed rate around 6.57% for 25 years, with the bank's first lien priced separately.
Can I buy an existing fabrication shop with an SBA loan?
Yes. A 7(a) loan can fund the purchase price, goodwill, equipment, inventory and working capital in one loan. Lenders will want the seller's tax returns, an equipment appraisal, a customer list showing concentration, and a transition plan for key accounts and skilled staff.
Is a metal shop building a special-purpose property?
Usually not. A standard industrial building with crane bays and heavy power is general-purpose for most lenders. Specialized plating or coating facilities with environmental issues may be treated differently, can need more equity, and nearly always require an environmental review before closing.
Sources: SBA 7(a) terms, conditions and maximum variable rates; Federal Reserve H.15 selected interest rates (bank prime loan rate); November 2026 SBA 504 debenture pricing, as published by CDCs; SBA FOIA 7(a) and 504 loan-level data.