BayFirst SBA 7(a) Guaranty Loan Purchases Exceeded the SBA Guaranty Amount by $3.5 Million in 2023-2025
March 24, 2026
Bob Coleman
Founder & Publisher
Hot Topic Tuesday: BayFirst SBA 7(a) Guaranty Loan Purchases Exceeded the SBA Guaranty Amount by $3.5 Million in 2023-2025
I analyzed BayFirst National Bank’s SBA 7(a) guaranty purchases for 2023 through 2025 using SBA data.
For the 287 loans purchased by SBA:
SBA Actual Guaranty Paid to BayFirst — $39,329,448
SBA Guaranty Original Portion — $35,776,635
Excess Payment Over Guaranty Amount — $3,553,113
Amount Paid Over Guaranty Loan Balance — 110%
There are two reasons for this:
SBA will pay up to 120 days of accrued interest to the lender.
Second, SBA will reimburse the lender for pre-approved litigation expenses. Of course, that is to recover and liquidate collateral, and in the normal course of business, these expenses are offset by the sale of the collateral.
However, BayFirst rarely had a net recovery of collateral. In fact, of the 287 loans, only 32, a little over 10% of the loans presented for purchase, had a net recovery.
One egregious loan illustrates the issue.
In 2022, BayFirst originated a $50,000 loan to a New York law firm. The SBA guaranteed $42,500. In 2023, SBA paid $98,567 under the guaranty, $56,000 more than the original guaranteed amount.
As previously reported in the Coleman Report, the bank was a top-ten SBA lender,
That volume was driven by its Bolt platform, built for high-throughput, small-dollar originations.
The strategy produced scale. It also produced risk. Operational complexity increased. Delinquencies followed. Losses accelerated.
And these are only the loans processed through SBA’s Herndon center. Guaranty purchases wind slowly through the system, with many still pending review.
BayFirst is ground zero for SBA’s new small loan policy that imposes tighter underwriting standards for loans less than $350,000.
The bank ceased its SBA lending operations last year.
Here is a recap of the top ten NAICS code charge-offs at BayFirst in 2023-2025:
