The final figures are now in for the SBA’s fiscal year 2022 504 loan program.
The year started on a torrid pace of originations, and while the pace slowed over the course of the year, originations still climbed 12.0% compared to FY2021. Originations this year are also up 85.7% compared to FY2019 before the COVID 19 pandemic struck. Unpaid Principal Balance of SBA 504 loans stood at $30.14 billion as of March 31, 2022, up 4.1% compared to the $28.94 billion figure at year-end FY2021. SBA 7(a) loan originations did not have the same expansion as 504 loans in FY2022. In fact, 7(a) loans declined (29.7)% compared to the previous year. The unpaid principal balance of 7(a) loans is $106.69 billion at March 31, 2021, up 2.7% compared to year-end FY2021.
The 7(a) program has shown steady growth in loan outstandings in recent years that continued through the end of FY2021 (6.8% in FY2021, 2.3% in FY2020, and 2.9% in FY2019). 504 loans have shown accelerating growth, rising 6.4% to $28.9 billion at year-end FY2021, after climbing 5.5% in FY2020 and (0.2%) in FY2019. Of course, the published 504 loan figures in the chart above include only the CDC/SBA second lien portion of a 504 loan package, If we include the private lender portion of the same loan projects, which typically accounts for 50% of 504 projects, The total for SBA 504 loan outstandings (1st and 2nd liens combined) would be somewhere in the neighborhood of $68 billion, still below 7(a) totals, but much closer.
The accelerated growth in loan originations in the 504 program in FY2022 has been very dramatic among several minority groups. Although 504 loans to non-minority borrowers still accounted for 54.5% of all loans in FY2022, the American Indian group showed a 64.1% increase in dollar volume in FY2022. The Black, Asian & Pacific Islander, and Hispanic groups also showed growth significantly above the average during the year. Despite falling under the average, loans to White borrowers still advanced 8.7% in FY2022.
