Business continues its return to normal following the Government shutdown in the U.S., which lasted from October 1 through November 12.
The chart on the left below shows SBA 504 loan origination volumes through the end of March when origination volumes were down 8.8% year-over-year, which is a marked improvement over the 18.7% decline reported at February 28, 2026. The same is not true in the SBA’s other major loan program. SBA 7(a) loans, which are now down 25.2% compared to the prior fiscal year through the same date, after being down 19.6% at the prior month end. We should note that the Trump administrations latest proposal for the 2027, released on April 3rd, would suggest a 67% reduction in the SBA’s discretionary funding for the coming year.
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 cumulative net charge-offs on 504 loans remain below 1.0% for all fiscal years since 2015, and at 0.2% or below for every fiscal year since 2018.
The majority of SBA 504 loans have traditionally gone to male-owned business. Though significant improvement has been made in recent years, the share of 504 loans going to businesses owned by women declined in FY2024 before rebounding some in FY2025. Through March 31, 2026, the share of 504 loan recipients that have more than 50% female ownership rose to 11.2% from 10.8% last year, while the share of 504 loan originations that have gone to business with less than 50% female ownership grew to 18.4% from 17.3%. Business primarily owned by males still account for 70.3% of loan recipients, but this is down from 72.0% at the same point in FY2025.
