SBA Loan Trends, Statistics and Opportunities

by | Sep 22, 2023 | Business Finance, Business Strategy, SBA, Small Business | 0 comments

SBA Loan Trends, Statistics and Opportunities

The Small Business Administration (SBA) loan industry is witnessing an exciting transformation. With changing trends and dynamics, the landscape vastly differs from what it was a few years back. This article unravels the latest developments in the industry and highlights the opportunities that lie ahead.

Evolution in Loan Application Trends

In 2021, traditional financing applications from small businesses saw a notable dip. Only 34 percent of small businesses applied for traditional financing, a significant drop from 43 percent recorded in 2019. This decline points towards a broader shift in the lending industry, where alternative lending options are gaining momentum.

The Rise of Online Lenders

Due to this decline in traditional financing, online lenders have become popular. A whopping 23 percent of applicants opted for online lenders, spotlighting the convenience and flexibility these platforms offer compared to traditional banks.

Unequal Lending Practices

Despite progress, the lending industry has some systemic inequities that need attention. In 2021, white business owners received the largest share of loans, approximately 42.4 percent. This disparity exposes the need for more equitable lending practices.

Gender Disparity in Loan Approvals

The gender disparity in the loan industry is glaring, with male-owned businesses dominating the scene. These businesses received 71.6 percent of approved loan amounts, indicating a need for more balanced lending practices.

Sector-Wise Beneficiaries of 7A Loans

The sectors most benefited from 7A loans were accommodation and food services, retail trade, and health care and social assistance.

Geographical Variations in Loan Approvals

Geographically, there were significant variations in loan approvals. Georgia led with the highest average approval, while Hawaii ranked bottom.

Trends in 2022

The year 2022 witnessed a significant decrease in average loan approvals, signaling a changing landscape in the SBA loan industry.

The SBA is evolving, and so are the opportunities for small businesses. If you need an SBA loan or any other business loan, First Union Lending is here to help.

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