SBA 7(a) Data Center Feasibility Study in North Carolina

North Carolina data centers: small 7(a) loans for a technical asset

Data centers are an unusual class for a small business program, and North Carolina's record is modest in scale. The 28 approvals total $10.4 million, where a $250,000 median works out to 1.25x the nationwide level, and loans in the middle of the group fall from $137,500 to $350,000. Franchising is 0.00%. North Carolina is tenth among states on loan count, while the class holds slot 20 of 39 within the state. Our margin test flags no distinctive metric, so what matters is how small the typical borrower is for an asset type usually associated with very large investments. A median of $250,000 is closer to a colocation suite, a server room fit-out or a small hosting business than to a purpose-built facility.

Newtek and the counties

Newtek Bank, National Association heads a short table, with 7 loans and $4.0 million in SBA's current-holder file. Wake County matches that with 7 loans, while Buncombe, Iredell and Mecklenburg stand at 4 apiece and Durham, New Hanover and Watauga at 2 apiece. The spread runs from the Triangle to the mountains and coast, rather than clustering in one metro. Approvals were thin for most of the decade: a single loan of $50,000 in FY2017, none in FY2021 or FY2023, and then 10 loans and $3.1 million in FY2025 and 3 loans and $2.4 million in FY2026.

North Carolina's loans here are too few to yield a cancellation percentage or a charge-off percentage. Silence is not a clean bill of health.

What the code blurs, and what a study must test

In SBA's coding, data centers are filed alongside general hosting and processing firms, so colocation buildings cannot be told apart from services that happen to rent servers. In North Carolina the study has to pin down the product: leased racks in a building the borrower owns, a managed hosting service, or an enterprise room for a single user. Demand should be shown through signed or credible customers, the density of power each customer needs, and the competing facilities in the region. Power is the central cost, both in utility service capacity and in backup systems, and the study should show the utility's commitment and the price of electricity. Cooling, fire suppression, security and network connectivity belong in the budget. Equipment turns over quickly, so replacement reserves matter. Coverage should hold with slower customer onboarding. Valuation will treat the building as built for one purpose, and the study should address reuse.