The pace of SBA 504 loan originations slowed yet again from the torrid pace set early in FY22.
Forty-five weeks into fiscal year 2022 (started October 1st), 504 loan originations are up 13.9% compared to the same period a year ago. Originations this year are also up 191.6% compared to the same period in FY2019 (pre-COVID). Originations were up 25.9% from the prior year one month ago, so while slowing, this is still very strong growth. Unpaid Principal Balance of SBA 504 loans stood at $30.14 billion as of March 31, 2022, up 4.1% compared to the $28.94 billion figure at year-end FY2021. SBA 7(a) loan originations have not shown the same uptick versus last year, as they are down (16.6)% compared to the same period the previous year, down slightly from the pace a month ago, when originations were down (7.9)% compared to the same period in FY2021. The unpaid principal balance of 7(a) loans is $106.69 billion at March 31, 2021, up 2.7% compared to year-end FY2021.
The 7(a) program has shown steady growth in loan outstandings in recent years that continued through the end of FY2021 (6.8% in FY2021, 2.3% in FY2020, and 2.9% in FY2019). 504 loans have shown accelerating growth, rising 6.4% to $28.9 billion at year-end FY2021, after climbing 5.5% in FY2020 and (0.2%) in FY2019. Of course, the published 504 loan figures in the chart above include only the CDC/SBA second lien portion of a 504 loan package, If we include the private lender portion of the same loan projects, which typically accounts for 50% of 504 projects, The total for SBA 504 loan outstandings (1st and 2nd liens combined) would be somewhere in the neighborhood of $68 billion, still below 7(a) totals, but much closer.
The majority of SBA 504 loans have traditionally gone to male-owned business, but this tendency has become more pronounced so far in FY2022. Loan originations to companies owned 50% or more by females grew 26.9% year-to-date, but these businesses account for only 9.6% of originations. Meanwhile, loans to business owned less than 50% by women have grown 10.2%. Loans to male-owned businesses have climbed 13.4% so far, this fiscal year. Loan originations to male-owned businesses now account for 70.6% of 504 originations.
