Editorial No. 1 · 2026-08-03
SBA Lender Rankings Are More Misleading Than Borrowers Realize
The “best SBA lender” lists rank banks by volume and get paid to do it. Neither has anything to do with whether a lender’s loans succeed — or whether they’ll fund yours.
By Gene Deghtyar · SBADecoded · A weekly column reading the SBA loan record for what it actually says.
Type “best SBA lenders” into any search box and you will get a dozen tidy rankings. Almost all of them rank banks by a single number: how many SBA loans the bank made last year. And almost all of them are paid by the lenders they rank. Both facts should bother you more than they do.
Start with the money. The overwhelming majority of “top lender” pages are run by brokers and lead-generation companies. When you click “get matched,” your information is sold, and the lenders featured most prominently are typically the ones paying the most. That is not a ranking of quality. It is an advertisement wearing a lab coat. (For the record: no lender pays to appear anywhere on this site, and we don’t sell your information because we don’t collect it.)
Now the data. Even if a volume ranking were perfectly honest, volume simply does not tell you what borrowers think it tells them. It does not measure whether a lender’s loans succeed, and it does not measure whether that lender will fund a deal like yours.
We pulled the federal loan record for the busiest SBA lenders and looked at the share of their loan dollars that ended up charged off. Among the fifteen highest-volume lenders, that figure runs from under half a percent to more than thirteen percent — a roughly 29-fold difference between banks that appear on the same “top lenders” lists. Live Oak Banking Company made 6,588 loans with a 0.53% charge-off rate. BayFirst National Bank made a comparable 7,831 loans at 9.15%. One number — volume — puts them side by side. The number that matters pulls them apart.
The 10 busiest SBA lenders, by how their loans actually performed
share of loan dollars charged off, 5-yrRanked by volume — the only metric the “best lender” lists use. The bars are what those lists never show: from 0.46% (Bank of America) to 13.55% (Lendistry), a 29-fold spread among lenders all marketed as “top.” Source: SBADecoded lender charge-off analysis.
What a charge-off rate does and doesn’t say
Read that chart carefully, because the honest version is more interesting than the outrage version. A high charge-off rate usually reflects who a lender serves, not how carelessly it lends. The lenders at the top of that list — the fintech-style, high-volume, very-small-loan shops — are often lending to the borrowers everyone else turns down. Lendistry’s 13.55% is inseparable from its mission of reaching businesses in underserved places. A high rate is a risk signal to weigh, not a verdict to fear.
But that cuts against the rankings just as hard. Because the flip side is that the lowest-charge-off lenders — the conservative names lending larger amounts to established, well-collateralized businesses — are frequently the ones who will never say yes to a first-time buyer with a modest down payment. The lender that looks “safest” on paper is often the one least likely to fund you. “Best,” it turns out, is not a property of the lender. It is a property of the match between the lender and your particular deal.
The limits of this data
The charge-off rate here is dollar-weighted over a five-year window — the lender convention — so it differs from the count-based default rates we use for franchises and industries. It reflects a lender’s borrower mix as much as its underwriting: small-loan and fintech lenders will structurally look worse, larger-loan lenders better. We rank only lenders with at least 100 recent loans, so newer or tiny lenders are excluded. Treat every figure as a signal to investigate, not a grade. The full methodology and the raw numbers are on the lender charge-off page.What this means if you’re borrowing
- Ignore any ranking sorted by loan volume. It is measuring the wrong thing, usually for money.
- Look at how a lender’s loans have actually performed — the charge-off record — and read it next to the loan count.
- Then match a lender to your deal: your size, your industry, your state. Our lender matcher ranks by fit, not by who paid.
- Learn the terms before you talk to anyone, so you can push on rate and structure instead of nodding along — start with the glossary.
- Run the actual payment before you sign, not after, with the SBA loan calculators. And if you’re buying a franchise, check the brand’s SBA default record first.
The ranking that should decide where you borrow isn’t the one that says who lent the most. It is the one that says who lends well to businesses like yours — and that ranking already exists, in public, in the loan record. You just have to find someone willing to show it to you without being paid to look the other way.
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This is an opinion column. It reflects the author’s reading of public federal loan data and is not legal, financial, or investment advice.