SBA 504 loan originations are up 18.5% as of May 31, 2025 compared to the prior fiscal year.
This represents a noticeable deceleration compared to the 21.3% rise posted as of April 30, 2025. Still, year-to-date approval volumes remain at the highest level in the last five years, with the exception of the pandemic year of FY2022. On the other hand, originations in the SBA’s other major loan program, SBA 7(a) loans, improved noticeably to a 38.6% increase compared to the prior fiscal year, up from the 35.3% jump in originations recorded through April 30, 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.
The majority of SBA 504 loans have traditionally gone to male-owned business. In recent years, the share of 504 loans going to businesses owned by women has fluctuated in a relatively narrow range of 28%-30%. However, within that range, we’ve seen a noticeable increase in the share of 504 loan recipients that have more than 50% female ownership, from 8.7%-9.8% between FY2020-FY2023, to 10.7%-11.4% from FY2024- FY2026. Consequently, the share of 504 loan originations that have gone to business with less than 50% female ownership has declined by similar amounts over this period.
