Black-owned businesses received 5,068 approvals through the Small Business Administration’s 7(a) loan program in fiscal 2024, according to a Brookings analysis of SBA summary data. Those approvals, which are not the same as final loan closings or disbursements, represented 7.2% of 7(a) approvals but 4.5% of approved 7(a) dollars. Brookings ↗

That split raises a practical question for Black business owners: Are more borrowers reaching SBA-backed credit while receiving smaller approvals on average than some other groups?

SBA’s 2024 Capital Impact Report put fiscal 2024 7(a) lending at roughly 70,000 loans and about $31.1 billion. SBA ↗ Using that portfolio total and Brookings’ rounded shares, the estimated average Black-owned 7(a) approval was about $276,000. That is an estimate, not an official SBA demographic average. It applies Brookings’ 4.5% dollar share to SBA’s reported 7(a) total, then divides by Brookings’ 5,068 Black-owned approvals.

Comparable estimates point to a size gap. Brookings reported that white-owned businesses received 45.7% of approvals and 39.4% of dollars, which suggests an estimated average approval near $382,000. Businesses Brookings identified as Asian American-owned received 11.3% of approvals and 18.5% of dollars, suggesting an estimated average above $720,000. Because the underlying shares are rounded and the public figures are summary-level data, those averages are directional, not exact.

Approvals also are not final proof of loan amount, closing, disbursement or borrower use of funds. Some approved loans may close at different amounts or may not be fully drawn. Public demographic data also do not answer every question about race, loan purpose, industry, collateral, lender or geography.

The numbers do not prove discrimination, steering or differences in loan purpose. Loan size can reflect revenue, collateral, industry, firm age, borrower demand, lender relationships and credit profile. But for Black business ownership, approval size matters. A modest credit line can help a company cover payroll, vendors or seasonal gaps. A larger SBA-backed loan may help buy equipment, finance a new location, purchase business real estate or acquire another company.

For more BlackBizDaily coverage, see our reporting on [capital access](/capital/access-to-capital-black-businesses/), [SBA lending](/capital/sba-loans-black-owned-businesses/) and [Black business growth](/entrepreneurship/black-owned-business-growth/).

The 7(a) program can finance growth

The SBA 7(a) program can support real estate, short- and long-term working capital, refinancing, equipment, furniture, fixtures, supplies and changes of ownership. The maximum 7(a) loan amount is $5 million. SBA ↗

That flexibility makes 7(a) more than a cash-flow product. For a Black entrepreneur, it can help finance an existing-business acquisition, partner buyout, equipment purchase, new-location build-out, commercial real estate tied to operations, or working capital connected to major contracts and receivables.

The same program can finance smaller liquidity needs. Those loans can be valuable, especially when a business needs to cover payroll, vendors or seasonal timing gaps. But a small loan used mainly to bridge short-term cash pressure may have a different long-term effect than financing tied to assets, acquisitions or major capacity expansion.

SBA’s success-story archive shows what growth-oriented 7(a) debt can look like, while also reminding readers that anecdotes do not prove portfolio-wide trends. In one Cleveland example, SBA said Robert P. Madison International received a $305,000 7(a) Express loan through Huntington in 2018 for the build-out of new quarters after Sandra Madison became majority owner and CEO/chair. SBA described the company as Ohio’s largest Black female-owned architecture firm. SBA ↗

The question is not whether 7(a) can support that type of growth. It can. The harder question is how often Black-owned borrowers receive capital large enough, and structured well enough, to change the asset base of the company.

SBA-backed lending has risen, but dollar share trails

SBA-backed lending to Black-owned businesses has increased since the early pandemic period, though some public comparisons combine multiple loan programs.

In a September 2023 release, SBA reported that 7(a) and 504 loans to Black-owned businesses rose from 1,718 loans totaling $592 million in fiscal 2020 to 4,387 loans totaling $1.308 billion in fiscal 2023 year-to-date. In that same year-to-date table, the Black-owned share of 7(a) and 504 loans rose from 3.5% to 7.5%. SBA ↗

By fiscal 2024, The Associated Press, citing SBA figures, reported that SBA-backed financing to Black-owned businesses reached about 5,200 loans totaling $1.5 billion. That broader SBA-backed figure should not be confused with Brookings’ 7(a)-only approval breakdown. AP also reported that SBA backed more than 38,000 7(a) loans under $150,000 for $2.7 billion, roughly double the fiscal 2020 number and one-third higher than fiscal 2023. AP ↗

SBA’s 2024 Capital Impact Report said core SBA financings topped 100,000 for the first time since 2008. The agency attributed the portfolio expansion partly to growth in 7(a) loans under $150,000, along with increased lending to female, Black and Latino entrepreneurs. SBA ↗

The picture is nuanced. More loans to Black-owned businesses appear in SBA-backed data than in 2020. But the fiscal 2024 7(a) data cited by Brookings show Black-owned firms’ share of dollars remained lower than their share of approvals. That lower estimated average approval amount does not reveal the full distribution of loan sizes, but it does raise legitimate questions about capital depth.

Working capital can mean survival or scale

“Working capital” is not automatically weak capital. For some firms, it means survival cash. For others, especially contractors, manufacturers, wholesalers and professional-services firms, working capital can support growth.

SBA’s 7(a) Working Capital Pilot became effective Aug. 1, 2024, and is scheduled to run through July 31, 2027. The pilot offers monitored lines of credit up to $5 million for domestic and international transactions. SBA describes the product as useful for businesses that need to finance large contracts, projects, accounts receivable or inventory. Federal Register ↗ SBA ↗

That distinction matters for Black-owned firms. A line tied to a government contract or receivables base can help a company scale without giving up equity. A small loan used only to plug recurring shortfalls has a different ownership impact.

SBA’s FOIA data page says loan-level 7(a) and 504 files are available and updated quarterly. SBA Open Data ↗ But the estimates in this article rely on Brookings’ published demographic shares, not a full loan-level demographic analysis. More detailed public analysis would be needed to compare loan purpose, size, lender, geography and industry by borrower demographics.

Until then, the careful conclusion is limited: Black-owned businesses are receiving meaningful numbers of 7(a) approvals, but their lower share of dollars raises questions about loan size, product type and long-term wealth-building impact.

Why approval size matters for Black wealth

Black entrepreneurs often face capital constraints tied to wealth, collateral, homeownership and debt burdens. Brookings has noted that lower Black homeownership and wealth reduce available collateral and that Black entrepreneurs often carry higher debt burdens, which can affect affordability and approval. Brookings ↗

Federal Reserve Small Business Credit Survey data, available through FRED, show that 32% of Black or African American-owned employer firms that applied for loans, lines of credit or merchant cash advances received the full amount sought in the 12 months before the 2025 survey. FRED cautions that the survey is not a random sample. Still, the measure shows that many Black employer firms that sought credit did not receive the full financing they requested. FRED ↗

The Consumer Financial Protection Bureau has also reported differential treatment in a pilot matched-pair test. In 2024, the CFPB said Black testers received less encouragement to apply and were more likely to be offered alternative products such as personal credit cards and home-equity loans, even though the Black testers were assigned slightly more favorable financial profiles than white testers. CFPB ↗

Those findings do not prove what happened inside SBA 7(a) lending. They do show why loan structure deserves scrutiny. Smaller loans can meet real needs, but they may not produce the same ownership-building effect as financing that helps a company buy assets, expand capacity or secure larger contracts.

SBA implemented 7(a) and 504 updates on Aug. 1, 2023, describing the changes as intended to expand access, especially for small-dollar loans and underserved borrowers. SBA ↗ The next test is whether access translates into larger ownership-building transactions for borrowers who can repay them.

For Black-owned firms, higher loan counts matter. But the deeper measure is whether entrepreneurs can secure capital large enough to buy assets, expand capacity, win bigger contracts and build companies with lasting value.