Small Business Lending Continues to Impact Economy Despite Uncertainty
The Small Business Administration’s (SBA’s) flagship 7(a) program has shown a significant spurt of 20% in the last fiscal year, setting a record of $37.3 billion in loans. This rise in lending activity, despite the ongoing economic uncertainty and disruption, indicates a robust demand for small business loans. It’s a clear sign of the resilience of the small business sector, which continues to perform even amidst concerns about inflation, tariffs, and marketplace uncertainty.
Live Oak Bancshares: The Biggest Gainer
Among the individual lenders, Live Oak Bancshares in Wilmington, North Carolina, emerged as the biggest gainer. The bank, which is typically known as the nation’s top 7(a) lender by dollar volume in recent years, saw its loan volume increase by an impressive 43% to $2.85 billion during fiscal 2025.
“We had an outsized good year,” Live Oak President BJ Losch told American Banker. He attributed the bank’s success to a mix of factors, including higher volumes of business-acquisition and small-dollar loans, coupled with more real estate-based loans.
Live Oak’s Business Pulse report also echoed the bank’s successful run. The report revealed that nearly two-thirds of the small businesses Live Oak surveyed predicted that they would meet or exceed their 2025 financial targets.
U.S. Bancorp: A Rising Contender
Another bank that showed strong growth in 7(a) lending during the last fiscal year was U.S. Bancorp. The company’s loan volume grew by 23% in fiscal 2025, reaching $871.2 million. Much like Live Oak, U.S. Bancorp’s growth was driven by strong demand, a trend that is expected to continue into SBA’s 2026 fiscal year.
“We’re not seeing any slowdown,” said Erik Daniels, U.S. Bancorp’s head of SBA lending. “We’re actually seeing continued momentum.” The bank has invested in technology and added staff to support this growing demand.
U.S. Bancorp’s successful fiscal 2025 followed a massive 74% increase in 7(a) lending volume during the previous fiscal year. The bank has also rolled out new technology aimed at small business owners, including payroll and accounts payable solutions.
Average Loan Size: A Trend Towards Larger Loans
The average 7(a) loan size increased to $477,600, up from $443,100 in fiscal 2024. Peter Leenhouts, Vice President of Sales at the business services firm Tax Guard, expects this trend towards larger loans to continue. According to him, this trend favors bigger lenders that have more resources.
Live Oak, with an average 7(a) loan size of over $1.25 million in fiscal 2025, is one such lender. However, they have also been working to increase the number of small-dollar loans they make. Losch revealed that loans of $350,000 or less now constitute a significant portion of Live Oak’s production volume for the first time in its history.
The SBA 7(a) Program: A Vital Resource for Small Businesses
The 7(a) program, which provides guarantees of 50% to 75% on loans up to $5 million, is SBA’s largest lending program. “The SBA 7(a) program continues to be a vital resource for American small business owners seeking access to capital,” Live Oak Chairman and CEO Chip Mahan said. “We’re honored to support our customers in securing this essential financing.”
The SBA’s second biggest program, the 504 program, approved loans totaling $7.8 billion in fiscal 2025. Despite the economic uncertainty, it’s evident that small businesses continue to seek and secure financing, demonstrating their resilience and adaptability.
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