Business is gradually returning 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 February when origination volumes were down 18.7% year-over-year, which is a marked improvement over the 317% decline reported at December 31, 2025. The same goes for originations in the SBA’s other major loan program. SBA 7(a) loans, which are now down 19.6% compared to the prior fiscal year through the same date, after being down 40.0% at year-end 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 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.
Overall, the number of SBA 504 loans originated year-to- date through February 28, 2026 was down 18.7% compared to the same period in FY2025. Driving this decline were loans in the higher size range, specifically loans between $500k and $2m, which fell 22.0% from the prior year and accounted for 42.7% of loans originated YTD, and loans over $2m, which slid 15.7% and accounted for 48.9% of loans originated. Loans from $150k-$250k also decreased substantially, dropping 24.5% from the prior year, but loans in this range only accounted for 1.4% of all loan originations.
