SBA Expands 90% Loan Guarantee to Energy Businesses: What to Know

The U.S. Small Business Administration recently expanded access to its International Trade Loan Program for qualifying small businesses across the U.S. energy production supply chain.

Effective August 14, 2026, eligible businesses in certain energy-related industries can access financing supported by an SBA guaranty of up to 90%.

For businesses considering expansion, equipment purchases, facility improvements, or additional production capacity, that change may create additional financing opportunities.

What Does the 90% Guarantee Mean?

The SBA is not guaranteeing that a business will receive 90% of the financing it requests, and participation does not guarantee loan approval.

The 90% refers to the portion of an eligible loan that the SBA guarantees to the participating lender.

That distinction matters.

By reducing a lender's exposure on a qualifying loan, the enhanced guaranty may make lenders more willing to consider financing businesses that meet the program's requirements.

The borrower still must qualify for financing and demonstrate the ability to repay the debt.

Which Businesses May Qualify?

The expanded program applies to qualifying small businesses in portions of the domestic energy production and supply chain.

Eligible classifications include areas such as: oil and natural gas extraction; oil and gas drilling; support activities for oil and gas operations; coal and metal ore mining; sand, gravel, stone, and other mineral extraction; and support services for mining operations.

Businesses should confirm their NAICS classification and eligibility with an SBA-participating lender before assuming they qualify.

Why This Matters to Lenders

From a lender's perspective, an SBA guaranty reduces a portion of the credit risk associated with a qualifying loan.

The 90% guaranty may therefore provide participating lenders with additional flexibility when evaluating financing for eligible energy businesses.

That does not eliminate normal underwriting. Lenders will still evaluate historical financial performance, cash flow, existing debt obligations, debt-service capacity, management experience, financial projections, and the purpose and structure of the financing.

For businesses seeking capital, the key point is simple: a stronger SBA guaranty does not replace strong financial preparation.

What Should a Business Do Before Approaching a Lender?

1. Confirm Eligibility

Determine whether the company's primary business activity falls within an eligible NAICS classification and discuss the program with an SBA-participating lender.

2. Make Sure the Financials Are Lender-Ready

Management should be prepared to provide accurate and current income statements, balance sheets, cash-flow information, accounts receivable and payable information, and existing debt schedules.

Accounting issues are much easier to address before underwriting begins.

3. Understand Repayment Capacity

A business should know how much additional debt it can realistically support. Management should evaluate existing obligations, expected cash flow, proposed loan payments, and downside scenarios.

The lender will want to understand not only why the business needs the financing, but also how the debt will be repaid.

4. Prepare a Clear Financing Plan

The business should be able to explain how much capital is required, how the proceeds will be used, how the investment is expected to affect revenue and cash flow, whether sufficient working capital will remain after the transaction, and how the proposed debt fits within the company's broader financial strategy.

Realistic projections can help management and the lender evaluate whether the financing makes economic sense.

Final Takeaway

The SBA's expansion of its 90% guaranty to qualifying energy-sector businesses may create a valuable financing option for eligible companies.

But the guaranty does not eliminate underwriting requirements or guarantee approval.

Businesses considering the program should approach lenders with accurate financial statements, a clear use-of-funds plan, realistic projections, and a demonstrated ability to service the proposed debt.

Strong preparation can materially improve the quality of the lender conversation and help management determine whether additional debt is the right strategic decision.

AFD CFO Advisory Services works with growing businesses on cash-flow forecasting, financial reporting, lender readiness, budgeting, and strategic financial planning. If your business is preparing for financing or evaluating how additional debt could affect cash flow and financial performance, learn more at AFDCFOAdvisory.com.

This article is for general informational purposes and does not constitute legal, tax, lending, or investment advice. SBA program requirements and lender underwriting standards are subject to change. Businesses should confirm current eligibility and program requirements directly with the SBA and participating lenders.