Answer · from the federal loan record
What percentage of SBA loans default?
Of SBA 7(a) loans old enough to judge — approved through FY2018 — 5.7% were charged off within seven years of approval (24,761 of 433,292 loans). Default risk falls sharply as loans get larger: 7.1% of loans under $150,000 defaulted, versus 1.9% of loans above $2 million.
Default rate by loan size
7-year charge-off rateSmaller loans fail far more often. A sub-$150k loan is nearly four times as likely to be charged off as a loan above $2 million. Thinner-capitalised borrowers, startups and unsecured working capital all cluster at the small end.
What "default" means here, and what it doesn't
This counts loans the SBA charged off — declared a loss after the guarantee was paid — within seven years of approval. It is not the same as being a day late. And it is a backward look at loans approved between 2010 and 2018; today's borrower faces different rates and conditions. It tells you how risky a loan of a given size has proven to be, not whether yours will fail.
Is 504 safer than 7(a)? → Default rates by franchise brand → Default rates by industry →
How we know
so you can check itSource. SBA's 7(a) FOIA release as of 2026-06-30 — US-government public domain. 433,292 funded 7(a) loans approved FY2010–2018 — every loan with at least seven years to fail. “Default” is a charge-off recorded within seven years of the approval date; loans still current, paid in full, or too young to judge are handled accordingly. Cancelled and never-disbursed approvals are excluded; leaving them in the denominator is the most common way these figures get published wrong.
Reproducing this. The source file is public and the pipeline is simple arithmetic. Write to corrections@sbadecoded.com if you think we have it wrong.