Main Street Monday: SBA 7(a) Lending Falls 21%: The New SOP, the BayFirst Exit, and the Vanishing Small Loan

July 13, 2026

Bob Coleman
Founder & Publisher

Main Street Monday: SBA 7(a) Lending Falls 21% –The New SOP, the BayFirst Exit, and the Vanishing Small Loan

SBA approved $21.8 billion in 7(a) loans through the first nine months of FY 2026 — down 21% from the same period last year. Loan count fell even harder: 40,824 approvals, down 30%.

Part of that is the government shutdown: October 2025 shows zero approvals in SBA’s own activity report — an entire month erased. But strip October out of both years, and the loan count is still down 25%. The small loan is disappearing from the 7(a) program, and the average loan has swelled to $535,034 — up 12% from last year’s $477,570.

This didn’t just happen. Three forces are driving it:

The end of “do what you do.” SBA’s new SOP eliminated the streamlined rule that let lenders apply their own credit practices to small-dollar loans. Full underwriting on a $150,000 working-capital loan doesn’t pencil — and the lenders who industrialized small-loan 7(a) have cut production roughly in half.

The BayFirst exit. BayFirst National Bank — the #10 lender by loan count last year, #5 the year before — shut down its Bolt program in August 2025 and exited SBA lending entirely, taking nearly 2,000 loans of annual capacity with it.

The citizenship restriction. SBA’s prohibition on financing non-citizen-owned businesses, green card holders, has removed a meaningful population of Main Street borrowers from the eligible pool — loans that never get applied for and never show up in any dataset.

The Top 5 — FY 2026 Dollar Volume:

Live Oak Banking Company — $1.66 billion
The Huntington National Bank — $1.04 billion
Newtek Bank — $999.5 million
U.S. Bank — $594.5 million
Northeast Bank — $496.9 million

Coleman Report Premium subscribers get the full analysis today, including: four lenders account for nearly half the program’s entire loan-count decline; the complete rankings breakdown of every SBA 7(a) lender; the biggest gainers (one lender is up more than 200%); and the money-center bank retreat.

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