SBA 7a Lending 2025: What SBA Data Reveals
A Record Quarter in Context
SBA 7a lending in 2025 is running at near-record highs. According to the SBA’s published Monthly and Yearly 7a Loan Activity Reports, Q2 FY2025 (January through March 2025) recorded more than $10 billion in approvals, the second-highest quarter in program history. The only period to surpass it remains Q4 FY2021, when pandemic relief measures fueled an unprecedented $16.9 billion.
The strong pace of activity in FY2025 did not stop there. It began with $8.73 billion in Q1, a 38 percent increase over the prior year’s first quarter, and continued with another $8.66 billion in Q3. Together, these three consecutive quarters represent the most sustained run of high lending volumes since the SBA began tracking in 1991.
For perspective, the SBA’s 7a program averaged only $4–5 billion per year in the 1990s and about $23–24 billion annually in the mid-2010s. Today, a single quarter rivals what once represented a full year’s worth of approvals.
What Is Driving the Growth
Several forces are shaping this elevated lending environment:
- Entrepreneurial churn: Layoffs and workplace changes are pushing more people to start businesses.
- Rising operating costs: Existing firms are seeking financing to manage expenses and fund incremental upgrades.
- Policy changes: SBA program adjustments, especially around small-dollar loan processing, have broadened access.
- Cautious borrowing: With interest rates still high, many businesses are taking smaller loans rather than large, long-term debt.
The Small-Dollar Loan Surge
The most striking trend is in loan size. The SBA’s Capital Impact Report confirms that portfolio growth is being driven by loans under $150,000. In FY2024, approvals of these small loans rose by roughly one-third compared to FY2023. By early FY2025, SBA data shows that more than half of all 7a loans were under $150,000, and more than 80 percent were under $500,000.
This indicates that entrepreneurs are borrowing conservatively, often to cover working capital, test new ideas, or expand in smaller steps. Unlike FY2021, when large loans dominated due to fee relief and expanded guarantees, the current wave is powered by many smaller deals that spread capital across a broader set of businesses.
SBA 7a quarterly loan approvals have climbed steadily since the 1990s, with record highs in 2021 and near-record volumes across multiple quarters in 2025.
The Tension Between Demand and Access
While overall lending volumes point to strength, recent surveys highlight growing friction in access to capital. According to the Federal Reserve’s July 2025 Senior Loan Officer Opinion Survey, banks reported tighter lending standards for small-business commercial and industrial loans. Institutions noted higher collateral requirements, smaller credit line limits, and shorter maturities, which have created new hurdles for startups and minority-owned firms.
This creates both opportunity and responsibility for lenders. The demand for capital is real, but ensuring equitable access requires mission-driven approaches. AmPac Business Capital offers the SBA 7a Community Advantage loan specifically to bridge this gap, providing smaller-dollar financing to underserved entrepreneurs who may not qualify under traditional standards. By combining access to capital with technical assistance and mentoring, AmPac helps ensure that businesses which might otherwise be left out of the current lending wave have a fair chance to grow.
What This Means for Lenders and Brokers
Anticipate sustained demand.
High SBA volumes in consecutive quarters show borrowers are not retreating from credit markets. Lenders should be prepared for clients to come in with both large financing needs (real estate, expansion) and much smaller working capital requests. Recognizing this dual demand allows partners to match clients with the right solution sooner.
Use small-loan growth as a conversation starter.
Many borrowers assume SBA programs are only for six- or seven-figure deals. With over half of recent SBA 7a approvals under $150,000, bankers and brokers can use this data to open conversations with clients who may be underestimating their eligibility or financing options. Even if your institution cannot profitably underwrite a very small loan, pointing clients to SBA Community Advantage lenders builds goodwill and strengthens your advisory role.
Position the 504 as the next step up.
For businesses that outgrow microloans or community advantage loans, the SBA 504 program becomes the logical next financing tool. Partners can frame this as a natural progression: start with a small-dollar 7a loan for immediate needs, then move to 504 for long-term real estate or equipment purchases. This creates continuity in the client relationship and keeps you in the loop for future, larger deals with AmPac.
Leverage partnerships to add value.
Certified Development Companies like AmPac are mission-driven, which makes us strong referral partners when you encounter clients who fall just outside your credit box. Even if you cannot place the deal, you can offer a trusted path forward, keeping the client in your relationship orbit until they are ready for larger financing.
The Bottom Line
When looking directly at the SBA’s published numbers, the story is clear: small-business lending in 2025 is booming compared to historical norms. Q1 FY2025 marked one of the strongest quarters in SBA history, and Q2 volumes were even higher. Unlike the pandemic-era spike, this wave is powered by small-dollar loans, showing both borrower caution and entrepreneurial energy.
For bankers and brokers, the takeaway is to prepare for steady demand, streamline small-dollar lending, and help borrowers strengthen their applications. And for underserved businesses that may face barriers, AmPac Business Capital’s role as a Certified Development Company and CDFI is critical. Through programs like the SBA 7a Community Advantage loan, AmPac offers an alternative path to capital, pairing flexible financing with technical assistance and mentorship. By filling these gaps, AmPac ensures that the lending wave of 2025 is not just a statistic, but a force for inclusive community growth.