SBA 504 loan originations continued at a rapid pace in February.
Twenty-two weeks into the new fiscal year (started October 1st), 504 loan originations are up 53.0% compared to the same period a year ago. This is not due to COVID slowdowns in the prior year. Originations this year are up 78.0% compared to the same period two years ago, a period just seeing the very beginnings of the pandemic. Originations were up 59.8% from the prior year one month ago, so while slowing, this is still exceptional growth. Unpaid Principal Balance of SBA 504 loans stood at $28.94 billion as of September 30, 2021, up 6.4% compared to the $27.20 billion figure at year-end FY2020. SBA 7(a) loan originations started the year more slowly, but they are up 1.2% compared to the same period the previous year, down slightly from the pace a month ago, when originations were up 5.3% compared to the same period in FY2021. The unpaid principal balance of 7(a) loans is $103.89 billion at September 30, 2021, up 6.8% compared to year-end FY2020.
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 $65 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 54.4% year-to-date, while loans to business owned less than 50% by women have grown 39.9%. However, loans to maleowned businesses have jumped 56.7% so far, this fiscal year. Loan originations to male-owned businesses now account for 72.0% of 504 originations.
