Do SBA 7(a) Loans Default? 36 Years of Credit Performance

"What's the default rate on SBA loans?" is the question every lender, investor, and borrower asks, and the honest answer is it depends entirely on when the loan was made. Below is the realized credit performance of every 7(a) loan approved from FY1991 through Mar 31, 2026 by vintage.

Loans Approved (FY1991+)

1,947,098

Disbursed Volume

$512.2B

Charged Off

$24.2B

Charge-Off Rate (% of approved $, disbursed loans)

4.72%

The Vintage Effect: Why Timing Is Everything

Charge-off rate by approval fiscal year, as a share of the dollars actually disbursed (you can't charge off money that never funded). The pattern is unmistakable: loans approved into the 2005-2008 run-up lost a staggering share: the FY2007 cohort charged off nearly 25% of disbursed dollars, with 2006 and 2008 close behind, while post-crisis underwriting (FY2010+) performs far better. The recent collapse toward zero is not a credit miracle; those loans are simply too young to have defaulted yet.

Read this chart by cohort, not calendar. A loan approved in 2008 had ~18 years to default; one approved in 2024 has had barely a year or two. Compare seasoned vintages to each other, and treat recent years as incomplete.

By Vintage Era

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Where Loans Stand Today (FY2020+)

The current status of every loan approved since FY2020. Most are still current; charge-offs will rise as these vintages season.

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The Full Credit Ladder (FY2020+)

Every disbursed loan placed on the standard credit ladder, each rate on its proper basis. Snapshot rates (delinquent / past due, in liquidation, deferred) are measured against loans still outstanding; cumulative outcomes (SBA-purchased, charged off, paid in full) against all disbursed loans. The two summary rates below are what a lender or secondary-market reader looks for first.

Guaranty Purchase Rate (cumulative)

4.88%

Charge-Off Rate (cumulative)

1.86%

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Which Industries Carry the Most Risk? (FY2020+)

Relative charge-off rates across the highest-volume industries. Absolute levels are low because these loans are young, but the ranking is informative: which sectors are already showing stress.

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Source: SBA 7(a) FOIA dataset, FY1991-present. The charge-off rate is gross charge-off dollars divided by the gross approval of loans that reached first disbursement (the SBA FOIA file publishes no funded-amount field, so approval of disbursed loans is the available denominator): a lifetime-to-date cohort rate, not annualized. It is not directly comparable to SBA's official Loss Report or subsidy rates. The Guaranty Purchase Rate is SBA-purchased plus charged-off loans as a share of disbursed loans; the industry table reports both as loan counts. Recent vintages are structurally understated because loans default over many years; see the vintage table for seasoned cohorts. Explore the full filterable dataset on the [main dashboard](/).