Original research · from the federal loan record
SBA 504 loans made since 2010 have defaulted at 1.1% — a fifth of the headline rate
Quote a default rate for the SBA 504 program and you will land on about 5%. But that number is a graveyard: it is dominated by loans approved in 2005–2009, which charged off at up to 19% when commercial property values collapsed. Sort every 504 loan by the year it was approved and the picture splits in two. 504 loans made since 2010 have defaulted at just 1.1% — and the most recent fully-seasoned vintage, FY2018, at 0.3%.
One program, two eras
7-year default, counted by loanThe 2005–2009 cohort defaulted at 13.8% — more than the entire rest of the program combined. Because 504 loans are secured on commercial real estate, they were hit unusually hard when property values fell in 2008–2010. Strip those five vintages out and the program’s history reads at 1–2%.
Why the “5%” overstates 504 today
A blended, all-time default rate answers a question almost nobody is asking: “how did 504 loans from the last three decades do?” If you are weighing a 504 loan in 2026, what matters is how recent loans have performed — and every vintage from 2010 onward has come in under 2.5%, most under 1%. The 5% figure isn’t wrong; it is just answering with the crash years still in the average. Nine straight vintages of low losses is a more honest read on the program as it lends now.
Every 504 vintage, 1991–2018
so you can check it| Approved | Seasoned loans | Charged off in 7 yrs | Default |
|---|---|---|---|
| FY1991 | 1,308 | 27 | 2.1% |
| FY1992 | 1,790 | 35 | 2.0% |
| FY1993 | 2,189 | 21 | 1.0% |
| FY1994 | 3,297 | 50 | 1.5% |
| FY1995 | 3,787 | 62 | 1.6% |
| FY1996 | 5,858 | 80 | 1.4% |
| FY1997 | 3,474 | 65 | 1.9% |
| FY1998 | 4,100 | 92 | 2.2% |
| FY1999 | 4,259 | 131 | 3.1% |
| FY2000 | 3,753 | 137 | 3.7% |
| FY2001 | 4,400 | 144 | 3.3% |
| FY2002 | 4,594 | 136 | 3.0% |
| FY2003 | 5,778 | 188 | 3.3% |
| FY2004 | 6,896 | 389 | 5.6% |
| FY2005 | 7,671 | 783 | 10.2% |
| FY2006 | 8,326 | 1,387 | 16.7% |
| FY2007 | 8,941 | 1,714 | 19.2% |
| FY2008 | 7,328 | 1,046 | 14.3% |
| FY2009 | 5,472 | 273 | 5.0% |
| FY2010 | 6,642 | 165 | 2.5% |
| FY2011 | 6,881 | 99 | 1.4% |
| FY2012 | 8,275 | 103 | 1.2% |
| FY2013 | 6,626 | 61 | 0.9% |
| FY2014 | 5,017 | 46 | 0.9% |
| FY2015 | 4,884 | 39 | 0.8% |
| FY2016 | 5,015 | 44 | 0.9% |
| FY2017 | 5,280 | 38 | 0.7% |
| FY2018 | 5,003 | 13 | 0.3% |
“Seasoned” loans are those approved through fiscal 2018, old enough to have run a full seven-year window by the 2026-06-30 data release. Cancelled and never-funded approvals are excluded. “Default” is a charge-off within seven years of approval, counted one loan at a time.
How we know
Source. SBA’s 504 FOIA releases of 2026-06-30, public domain, both the 1991–2009 and 2010–present files. 146,802 seasoned loans in all. The method is exactly the one behind our headline all-504 figure — charge-off within seven years, counted by loan — simply grouped by the fiscal year each loan was approved. The same vintage pattern shows up in 7(a) lending; 504’s is sharper because it is concentrated in real estate. See how 504 compares with 7(a) →