SBA 504 loan originations are up 15.1% as of August 31, 2025, compared to the prior fiscal year.
This represents a noticeable deceleration compared to the 18.2% rise posted as of July 31, 2025. Year-to-date approval volumes remain below volumes reached year-to-date in FY2021 and FY2022. Originations in the SBA’s other major loan program, SBA 7(a) loans, also decelerated noticeably to a 19.6% increase compared to the prior fiscal year, up from the 24.3% jump in originations recorded through July 31, 2025.
Cumulative gross charge-offs for the SBA 504 program have traditionally been very low, as seen in the graph above right. Demonstrating the strong credit quality of this program is the fact that the three-month period from March 2025 to June 2025 saw the first charge-offs from 504 loans originated in FY2020. Still, at just under $1.8 million, these charge-offs still represent just 0.04% of loan originated in that year. In fact, cumulative net charge-offs on 504 loans remain below 1.0% for all fiscal years since 2014.
Overall, the number of SBA 504 loans originated year-to- date through August 31, 2025 was up 11.4% compared to the same period in FY2024. Driving this growth were loans in the higher size range, specifically loans between $500k and $2m, which grew 12.2% from the prior year and accounted for 44.4% of loans originated YTD, and loan over $2m, which grew 18.2% and accounted for 46.7% of loans originated. Loans from $150k-$250k also grew substantially, rising 10.2% from the prior year, , but loans in this range only accounted for 1.5% of all loan originations.
