SBA 504 loan originations are up 0.9% compared to the prior year at July 31.
They were up 2.6% compared to the prior year when we reported last month, although that figure was boosted by the use of a later date for the FY2024 numbers. Still, this represents an improvement in originations compared to two months ago, when originations were down 1.6% compared to the prior year. Likewise, SBA 7(a) originations are now up 13.2% fiscal year-to-date compared to the 16.3% reported last month (through July 13). This is an improvement compared to the 8.5% advance measured at May 31, 2024.
The 7(a) program has shown steady growth in loans outstanding in recent years that continued into FY2024 (up 1.2% year-to-date in FY2023, 3.1% in FY2022, and 6.8% in FY2021). 504 loans had shown accelerating growth, rising 9.7% in FY2023, 6.7% in FY2022, and 6.4% in FY2021. However, after two years reduced origination volumes following the big jump in originations during the COVID pandemic, the outstanding loan balances in the 504 program have begun to decline, falling 6.4% fiscal-year-to-date in FY2024. We continue to note that the published 504 loan figures in the chart above include only the CDC/SBA second lien portion of a 504 loan package, If we include the private lender portion of the same loan projects, which typically accounts for roughly 50% of 504 projects, The total projects supported by the SBA 504 second lien loans at March 31, 2024 would be roughly $79 billion, equal to approximately 70% of the 7(a) balance.
The majority of SBA 504 loans have traditionally gone to male-owned business. Although the general trend over the past ten years has seen a steady increase in the percentage of loans going to women-owned businesses, this trend has stalled recently. Loan originations to companies owned 50% or more by females decreased to 11.0% YTD in FY2024 from 11.5% in FY2023, while loans to business owned less than 50% by women retreated modestly to 17.7% from 18.1%. As a result, loans to male-owned businesses rose to 71.3% in YTD FY2024 from 70.4% in FY2023 and 70.9% in FY2019.
