Carpet and rug mill loans: SBA rates and eligibility
Carpet and Rug Mills · NAICS 314110 · Program that usually fits: 7(a) and 504
Carpet and rug mills make tufted, woven and other floor coverings from yarn. Large mills dominate broadloom carpet, so small borrowers here tend to be rug makers, custom and hospitality carpet producers, specialty weavers and mills that serve niche markets. Loans are equipment-heavy: tufting machines, looms, finishing and dyeing lines, plus the plant itself. Lenders focus on customer concentration, raw material costs and whether the equipment has a resale market if things go wrong.
Who qualifies
Manufacturers that meet the SBA size standard for this code, which is measured by employee count. That covers most independent rug and specialty carpet makers. Lenders want management with mill or textile manufacturing experience and clear relationships with distributors, designers or contract buyers. Importers that only resell rugs made elsewhere are wholesalers or retailers, not mills, and are underwritten differently.
Which SBA program fits
504 for plants and heavy equipment
A 504 loan finances a mill building or major machinery with a long fixed rate. Manufacturers can access up to $5.5 million in SBA debenture, larger than the standard limit.
7(a) for acquisitions and working capital
A 7(a) loan covers buying an existing mill, mixed equipment and working capital needs, including yarn inventory, on a 10-year term. It suits buyers who need goodwill and inventory financed along with the machinery.
Export and line-of-credit options
Mills selling overseas can look at SBA export working capital loans, and CAPLines can fund inventory and receivables on large contract orders. These lines revolve as orders ship and customers pay, which fits mills with long production cycles.
What borrowers use the money for
- Tufting machines, looms and finishing lines
- Buying or expanding a manufacturing plant
- Yarn and backing inventory
- Buying an existing rug or carpet mill
- Energy-efficient dryers and dye equipment
Typical loan amounts, down payment and terms
Loans to carpet and rug makers often range from $250,000 to $5 million. A 504 project usually needs about 10% down, or 15% for a start-up or special-purpose building. 7(a) acquisitions need at least 10% equity. Equipment terms run up to 10 years, or longer for heavy machinery with a long useful life, and real estate up to 25 years.
What lenders look at for a carpet or rug mill
Lenders check whether a few big customers, such as a flooring distributor or a hospitality chain, account for most sales. They look at gross margins over several years, since yarn and petroleum-based material costs swing. Equipment appraisals matter because specialized textile machinery can be hard to resell. Expect questions about import competition, environmental permits for dyeing and wastewater, and whether the plant has room to grow without another move.
Example: a $1,500,000 loan
At today's maximum variable 7(a) rate of 10.00% over 25 years, the payment would be about $13,631 a month. Most well-qualified borrowers get a lower rate. Try your own numbers.
Free · takes 1 minute · no credit check
Get matched with an SBA lender
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 carpet and rug mills loans
Can a carpet manufacturer get an SBA loan?
Yes. Carpet and rug mills that meet the SBA size standard are eligible for 7(a) and 504 loans. Common uses are tufting and weaving equipment, plant purchases or expansions, yarn inventory and buying an existing mill.
What is the SBA 504 limit for a manufacturer?
Manufacturers can receive up to $5.5 million in SBA debenture per project, compared with $5 million for most businesses. Combined with the bank's first lien and your equity, total project size can be much larger.
What is the 504 rate for a mill building?
The 25-year all-in 504 debenture rate was about 6.57% in November 2026. That fixed rate applies to the SBA's share, roughly 40% of the project. The bank's 50% first lien is priced separately. Ask your CDC for the current rate.
Can I buy a rug manufacturing business with an SBA loan?
Yes. A 7(a) loan can finance the purchase price, equipment and working capital. You'll need at least 10% equity, and the lender will review customer lists, equipment condition, margins and whether key employees will stay after closing.
How long can I finance carpet machinery?
Standard 7(a) equipment loans run up to 10 years. Heavy machinery with a longer useful life can sometimes go longer, and 504 loans offer 10, 20 or 25-year terms depending on what is being financed.
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.