By Mario Bailey · Source: SBA FOIA 7(a) and 504 data, as of 2026-03-31
Published · Updated
1. Which lenders have the best and worst charge-off track records
Among the 121 major SBA lenders in the data (those with at least 1,000 funded 7(a) loans since FY2010), 7(a) charge-off rates run from 0.01% to 14.16%, a spread of about 1,416 times. That is far wider than the overall 7(a) charge-off rate across every lender in the data, 3.97%.
The best track records
These major lenders have funded the fewest charged-off loans relative to their 7(a) volume.
These lenders skew toward larger, more collateralized 7(a) loans: the top five average $1,073,596 per loan, versus $582,929 across all 120 major lenders in this ranking.
The high end: strategy, not a scorecard
A high charge-off rate here usually reflects a lender's strategy, not the quality of its underwriting. Loans under $50k charge off at 5.9%, more than 8 times the 0.7% rate on loans of $5M and up (see finding 2 below). A lender built to fund thousands of small, thin-file, or program-specific loans will show a higher book rate than one funding a few large, collateralized deals, even when both underwrite responsibly. This is not a "worst lenders" list; it is a map of who each lender is built to serve.
A non-bank SBLC (Small Business Lending Company), one of 14 entities the SBA licenses to make 7(a) loans outside the banking system. Non-bank SBLCs specialize in smaller, harder-to-place 7(a) loans that banks pass on.
The nation's top SBA 7(a) Community Advantage lender, a mission-based program built to reach thin-file and underserved borrowers that conventional underwriting screens out. An elevated rate is close to the point of the program, not a failure of it.
A high-volume, small-dollar SBA lender that originates loans through fintech-platform partners at scale; volume-and-partner models trade a higher book rate for reach.
The single most active 7(a) lender in this data by loan count (32,645 loans since FY2010); running that much small-loan volume shows up as a higher book rate even with disciplined underwriting.
Ran Bolt, a publicly documented small-balance 7(a) program for loans up to $150,000. BayFirst discontinued Bolt in August 2025 after losses concentrated in that book, and said so in its own public disclosures.
- Not a full risk picture: it covers 7(a) loans only, so a lender's 504 book (if any) is not reflected.
- Not seasoned: it is a cumulative rate over FY2010–2026 originations, not adjusted for how long each loan has had to season. A young book understates its eventual rate.
- Not normalized: names are not deduplicated across mergers or rebrands, and rate is not adjusted for a lender's mix of loan size, industry, or borrower risk.
- Not a verdict on quality: a higher rate usually reflects who and how a lender chooses to fund, as described above.
- Not a prediction: this is a historical statistic about loans already funded, not a forecast for any current or future loan.
A methodology note on names. The SBA does not normalize lender names across entities, mergers, or rebrands, so our per-name rollup can occasionally blend two or more unrelated institutions that share a name into a single row. We test every extreme row in this ranking for that signature (a rate far outside the normal range for major lenders, combined with loan volume that is not concentrated in any single state, i.e. no plausible single branch network behind the number) and exclude any row that fails the test from this leaderboard. 1 row was excluded from the 121 lenders that otherwise met the major-lender bar, for this reason, in the current data.
The full major-lender leaderboard
All 120 major lenders that passed the name-normalization check above, ranked by 7(a) charge-off rate. Search for a specific lender or sort by any column.
2. Smaller loans charge off far more often
Charge-off rates fall steadily as loan size rises, from 5.9% on loans under $50k down to 0.7% on the largest loans. Bigger loans tend to go to more established businesses with more collateral, which the data reflects.
3. Industry matters a lot
Charge-off rates vary widely by sector. Transportation and Warehousing loans charge off at 5.6%, about 2 times the rate of Health Care and Social Assistance (2.4%). Sectors shown have at least 2,000 loans.
4. The interest rate barely predicts default
You might expect higher-rate loans to default more. In this data they do not: the correlation between a 7(a) loan's initial note rate and whether it charged off is about -0.002, essentially zero. Note rate alone is not a risk signal here, and what little pattern exists is confounded by loan age (the highest rates are on the newest, least-seasoned loans).
| 7(a) note rate | Charge-off rate | Loans |
|---|---|---|
| Under 5% | 1.6% | 81,569 |
| 5% to 7% | 4.1% | 398,601 |
| 7% to 9% | 5.8% | 187,806 |
| 9% to 11% | 3.5% | 161,795 |
| 11% and up | 2.5% | 89,856 |
5. When charge-offs happen: almost never in year one
The question a struggling borrower actually asks is not "what predicts a charge-off" but "when does it happen, and how common is it really". To answer it honestly we need cohorts that have lived long enough: the 8 approval years FY2010–FY2017, whose 433,488 7(a) loans have each been observable for at least 8 full years as of 2026-03-31. In those mature cohorts, 23,894 loans (5.51%) have charged off to date, and the timing is strikingly consistent: almost no loan charges off in its first year (0.7% of charge-offs), the median charge-off among those occurring within 8 years lands 4.3 years after approval, and the single most dangerous year is year 4. Years 2 through 6 account for 75.7% of all charge-offs that occur within 8 years.
Share of mature-cohort charge-offs (those occurring within 8 years of approval) by years since approval:
A timing caveat that works in the borrower's favor: the charge-off date is the accounting endpoint, recorded only after workout attempts, liquidation, and the SBA guarantee purchase have run their course. The underlying payment trouble typically starts well before the dates charted here, and there is a long tail after them too: 3,068 mature-cohort charge-offs ( 12.8% of dated ones) happened more than 8 years after approval.
The cohort table, censoring shown, not hidden
Each row is an approval-year cohort; each column is the cumulative share of that cohort charged off within that many years of approval. A blank cell means the cohort has not yet been observable that long as of 2026-03-31, so the number does not exist yet. This is why a young cohort's low rate is not good news in itself: the FY2024 cohort's 0.62% to date is mostly youth, not underwriting.
| Cohort | Loans | By yr 1 | By yr 2 | By yr 3 | By yr 5 | By yr 8 | To date |
|---|---|---|---|---|---|---|---|
| FY2010 | 47,000 | 0.03% | 0.84% | 1.70% | 3.41% | 5.20% | 6.14% |
| FY2011 | 53,710 | 0.04% | 0.45% | 1.12% | 2.47% | 3.99% | 4.79% |
| FY2012 | 44,374 | 0.02% | 0.35% | 1.00% | 2.25% | 3.89% | 4.64% |
| FY2013 | 46,395 | 0.04% | 0.35% | 0.88% | 2.16% | 3.68% | 4.53% |
| FY2014 | 52,044 | 0.05% | 0.45% | 1.02% | 2.68% | 4.35% | 5.15% |
| FY2015 | 63,461 | 0.04% | 0.40% | 1.25% | 3.06% | 4.93% | 5.59% |
| FY2016 | 64,074 | 0.03% | 0.62% | 1.66% | 3.24% | 5.48% | 6.07% |
| FY2017 | 62,430 | 0.04% | 0.68% | 1.60% | 3.76% | 6.24% | 6.66% |
| FY2018 | 60,354 | 0.10% | 0.75% | 1.46% | 4.12% | – | 6.79% |
| FY2019 | 51,907 | 0.05% | 0.37% | 1.33% | 3.42% | – | 5.50% |
| FY2020 | 42,298 | 0.00% | 0.18% | 0.70% | 2.22% | – | 3.12% |
| FY2021 | 51,856 | 0.01% | 0.19% | 0.64% | – | – | 2.11% |
| FY2022 | 47,678 | 0.06% | 0.58% | 1.67% | – | – | 2.99% |
| FY2023 | 57,362 | 0.04% | 0.83% | – | – | – | 2.40% |
| FY2024 | 70,242 | 0.04% | – | – | – | – | 0.62% |
| FY2025 | 78,078 | – | – | – | – | – | 0.02% |
| FY2026 (partial) | 26,466 | – | – | – | – | – | 0.00% |
Two things worth reading off this table. First, the curves are stable: every mature cohort crosses roughly half of its lifetime-to-date rate during year five, occasionally year six. Second, the pandemic-era cohorts are aging unusually well at the same age: four years in, the FY2021 cohort sits at 1.39% versus 2.50% for FY2017 at the same point. FY 2026 is a partial year (the file is a mid-year snapshot).
Where the whole book stands right now
The same file records a servicing status for every 7(a) loan as of 2026-03-31. Of the 919,729 7(a) loans approved since FY2010, 30,334 (3.30%) are currently in some recorded stage of distress short of charge-off: delinquent, past due, in liquidation, or with the guarantee already purchased by the SBA. Status codes are shown exactly as the SBA records them.
| Status code | Meaning | Loans | Share |
|---|---|---|---|
| P I F | paid in full | 453,666 | 49.33% |
| CURR | current | 259,455 | 28.21% |
| CANCLD | cancelled | 112,406 | 12.22% |
| CHGOFF | charged off | 36,512 | 3.97% |
| COMMIT | approved, not disbursed | 23,772 | 2.58% |
| PURCH(NOT C/O) | guarantee purchased by SBA, not charged off | 13,891 | 1.51% |
| LIQUID | in liquidation | 8,326 | 0.91% |
| DELINQ | delinquent | 5,467 | 0.59% |
| CLSLN | as coded in the FOIA file | 2,853 | 0.31% |
| PSTDUE | past due | 2,650 | 0.29% |
| DEFERD | payments deferred | 730 | 0.08% |
| SOLDNC | as coded in the FOIA file | 1 | 0.00% |
This table also makes the denominator visible: every rate on this page divides by all 7(a) records in the file, including cancelled and never-disbursed approvals, the same convention used across this site. And when a loan does charge off, the loss is usually most of the loan: across the 36,497 charge-offs reporting an amount, the median write-off equals 81.7% of the original approval (quartiles 58.6% to 95.5%), $5.5B written off in total since FY2010.
If you are reading this because your own loan is slipping, the numbers above are the honest base rate: distress is real but rare, and it is a years-long process with exits, not a cliff. The step-by-step of what actually happens, workout to liquidation to guarantee purchase to offer in compromise, is in our guide: what happens if you default on an SBA loan.
What this means for owners
Charge-off rate is one lens on a lender's book, not a verdict on any single business. If you run a smaller or higher-risk-sector business, expect more scrutiny and lean on lenders that are active in your industry. Compare lenders by track record in the best-lenders ranking, and see how lending has shifted over time in Trends.
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Mario Bailey. (2026). What predicts an SBA loan charge-off?. SBA Loan Index. https://sbaloanindex.com/studies/sba-charge-off-patterns/
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