June 21, 2022
SBA Hot Topic Tuesday – Lending to Underserved Markets Improves in 7(a) and 504 Programs
The 504 program continues its trajectory of record-breaking lending levels with $6.8 billion being approved as of June 10, 2022. There is an over 32% increase in the dollar approval amount for the 504 program compared to the same time in fiscal Year 2021. A total of 6,835 504 loans were approved as of June 10, an almost 10% increase compared to the previous year. With an $11 billion lending capacity for the 504 loan program, funding should be available until September 30, the end of FY22.
There is an increase in the number and dollar amount of 504 loans approved for minority-owned, female-owned, and veteran-owned businesses.
As of June 10, 2022, $16.26 billion in 7(a) loans has been approved, roughly a 6.4% decrease from the same time last year. Conversely, with a 9.16% increase from last year, 30,667 7(a) loans have been approved so far. Funding will be available throughout the rest of FY22.
Trends in the 7(a) loan program throughout fiscal year 2022 have interchanged from fiscal year 2021. Last year there was a higher dollar amount approved in the 7(a) loan program and a smaller number of loans approved compared to the year before. In fiscal year 2022, there are a larger number of 7(a) loans and a smaller dollar amount approved when compared to fiscal year 2021.
The 7(a) loan program has increased the number of loans approved for underserved markets such as veteran-owned, female-owned, hispanic-owned, and black-owned businesses.