SBA 504 loan originations are up 19.3% as of June 30, 2025 compared to the prior fiscal year.
This represents a noticeable acceleration compared to the 18.5% rise posted as of May 31, 2025. Still, year-to-date approval volumes have slipped a bit to stand below volumes reached year-to-date in FY2021 and FY2022. On the other hand, originations in the SBA’s other major loan program, SBA 7(a) loans, decelerated noticeably to a 29.4% increase compared to the prior fiscal year, up from the 38.6% jump in originations recorded through May 31, 2025.
Cumulative gross charge-offs for the SBA 504 program have traditionally been very low, as seen in the graph above right. There was a spike in the lead-up and immediate aftermath of the 2007-2008 financial crisis, but charge-offs quickly fell back as the financial crisis wound down. From a peak of 18.2% in 2007, gross charge-offs fell to 2.0% in 2010, and 0.9% in 2014. Since that year, gross charge-offs have remained below 1.0%, and have not exceeded 0.1% since 2017.
Originations have grown substantially in all business age categories so far in FY2025. Leading the charge is loans involving a change of ownership of an existing business, which have shown an increase in originations of 52.6% compared to last year through June. Following closely behind, loans to new businesses or businesses less than 2 years old have grown 44.9% from the prior year. Showing a less rapid rise, businesses 2 or more years old have advanced 18.9%, while loans funding a startup have risen 10.4% over the same period.
