BayFirst SBA 7(a) Guaranty Loan Purchases Exceeded the SBA Guaranty Amount by $3.5 Million in 2023-2025
April 2, 2026 EDIT: The following is a letter I received from BayFirst President & CEO Tom Zernick. With his approval, I am publishing his response to our previous reporting, clarifying BayFirst is current with its SBA obligations and no payments are outstanding to the agency.
Good morning, Bob:
I’m writing to address several aspects of your recent piece on BayFirst’s SBA 7(a) guaranty purchases, as the analysis creates misleading implications about BayFirst’s practices and intent.
BayFirst has consistently met its financial obligations to the SBA. Over many years of participation in the program, we have valued our partnership with the SBA and maintained a strong record of timely payment of all receivables due to the agency.
As you noted, guaranty purchases may include accrued interest (up to 120 days) as well as certain pre-approved recovery and litigation expenses. As a result, total payments exceeding the guaranteed principal are a standard outcome of the program and do not indicate overpayment, anomaly, or any incentive tied to loan performance.
That said, from time to time, the SBA may determine that amounts are due back, which is part of the normal course of the program. In those instances, we are invoiced and promptly remit any amounts owed. Consistent with this ongoing reconciliation process, at the time of our exit from SBA originations in December 2025, BayFirst confirmed with the SBA that all accounts were fully current. We remain committed to the timely settlement of any receivables due to the agency.
We request that this additional context be reflected in your coverage to ensure an accurate understanding of SBA program mechanics and BayFirst’s position. We are available to provide further detail if needed.
Thank you for your time and consideration.
Respectfully submitted, Tom Zernick, CEO
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:
