SBA 504 loan originations are up 18.2% as of July 31, 2025, compared to the prior fiscal year.
This represents a noticeable deceleration compared to the 19.3% rise posted as of June 30, 2025. Still, year-to-date approval volumes have slipped a bit to stand 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 24.3% increase compared to the prior fiscal year, up from the 29.4% jump in originations recorded through June 30, 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.
The faster growth in loan originations in the 504 program in FY2025 is most pronounced among Black borrowers, with this group experiencing a 43.4% increase in originations versus the prior fiscal year. Origination growth among White, “Undetermined”, and Hispanic borrowers also rose substantially, jumping between 15% and 21% compared to the prior fiscal year. The final two minority groups, American Indian and Asian or Pacific Islander borrowers saw slower growth of 4.1% and 13.2%, respectively vs last year.
