What "charged off" means, and why cohort maturity matters
Every loan in SBA's 7(a) and 504 files has a status. This site reports those statuses in SBA's own words and turns one of them into a rate. This page explains the words and the arithmetic.
SBA's loan statuses
| Status in the file | Meaning, from SBA's data dictionary |
|---|---|
| PIF | Paid in full. |
| CHGOFF | Charged off. The file also gives the date SBA charged the loan off and the gross amount: the total balance charged off, guaranteed and non-guaranteed portions together. |
| CANCLD | Cancelled. The approval was withdrawn, usually before any money was disbursed. |
| COMMIT / NOT FUNDED | Approved but undisbursed. |
| EXEMPT | Disbursed and neither cancelled, paid in full nor charged off. SBA withholds the current status of these loans under FOIA Exemption 4; on this site they are "still outstanding". |
A charge-off is an accounting step taken when the lender and SBA have concluded that the remaining balance is unlikely to be collected. It is a statement about a loan's balance. It does not by itself say that the business closed, and it does not by itself cancel what the borrower owes.
Why new loans are left out
A 7(a) loan commonly runs ten years and a 504 loan twenty or twenty-five. A loan approved last year has had almost no time to be paid off and almost no time to go wrong, so nearly all recent loans sit in the "still outstanding" column. A rate that mixed them in would flatter any lender, place or industry that has grown recently and would move every quarter for reasons that have nothing to do with how loans perform.
So every charge-off rate on this site is computed on matured cohorts only: loans approved at least five fiscal years before the current one, which today means FY2010–FY2021. Within those years the rate is the number of loans SBA records as charged off divided by the number disbursed. Cancelled and never-disbursed approvals are not in the denominator. No rate is shown on fewer than 30 disbursed loans.
The rate for every approval year
The table shows why the approval year matters so much. Loans approved just before the 2008 recession were charged off at several times the rate of loans approved after it, whoever made them. A lender that was most active in FY2006 to FY2008 carries that history; one that started in FY2015 does not.
| Approved in | 7(a) disbursed | 7(a) charged off | 7(a) share | 504 disbursed | 504 charged off | 504 share |
|---|---|---|---|---|---|---|
| FY2021 | 45,165 | 1,277 | 2.8% | 8,122 | 11 | 0.1% |
| FY2020 | 36,464 | 1,461 | 4.0% | 6,068 | 7 | 0.1% |
| FY2019 | 45,671 | 3,057 | 6.7% | 5,264 | 15 | 0.3% |
| FY2018 | 54,195 | 4,277 | 7.9% | 5,003 | 22 | 0.4% |
| FY2017 | 56,079 | 4,327 | 7.7% | 5,280 | 43 | 0.8% |
| FY2016 | 56,789 | 4,075 | 7.2% | 5,015 | 52 | 1.0% |
| FY2015 | 55,421 | 3,797 | 6.9% | 4,884 | 60 | 1.2% |
| FY2014 | 45,962 | 2,942 | 6.4% | 5,017 | 67 | 1.3% |
| FY2013 | 40,416 | 2,422 | 6.0% | 6,626 | 94 | 1.4% |
| FY2012 | 38,889 | 2,439 | 6.3% | 8,275 | 169 | 2.0% |
| FY2011 | 45,628 | 3,146 | 6.9% | 6,881 | 142 | 2.1% |
| FY2010 | 39,913 | 3,671 | 9.2% | 6,642 | 223 | 3.4% |
| FY2009 | 36,636 | 5,391 | 14.7% | 5,472 | 350 | 6.4% |
| FY2008 | 61,636 | 18,671 | 30.3% | 7,328 | 1,307 | 17.8% |
| FY2007 | 88,270 | 32,439 | 36.7% | 8,941 | 2,146 | 24.0% |
| FY2006 | 86,570 | 27,820 | 32.1% | 8,326 | 1,945 | 23.4% |
| FY2005 | 84,436 | 20,680 | 24.5% | 7,671 | 1,422 | 18.5% |
| FY2004 | 71,283 | 13,172 | 18.5% | 6,896 | 920 | 13.3% |
| FY2003 | 59,119 | 9,102 | 15.4% | 5,778 | 591 | 10.2% |
| FY2002 | 45,184 | 6,074 | 13.4% | 4,594 | 419 | 9.1% |
| FY2001 | 37,323 | 5,445 | 14.6% | 4,400 | 420 | 9.5% |
| FY2000 | 37,600 | 5,557 | 14.8% | 3,753 | 357 | 9.5% |
| FY1999 | 37,097 | 5,219 | 14.1% | 4,259 | 324 | 7.6% |
| FY1998 | 36,018 | 4,815 | 13.4% | 4,100 | 214 | 5.2% |
| FY1997 | 38,823 | 4,812 | 12.4% | 3,474 | 177 | 5.1% |
| FY1996 | 39,744 | 5,178 | 13.0% | 5,858 | 220 | 3.8% |
| FY1995 | 48,700 | 6,127 | 12.6% | 3,787 | 154 | 4.1% |
| FY1994 | 32,132 | 3,261 | 10.1% | 3,297 | 107 | 3.2% |
| FY1993 | 23,367 | 1,904 | 8.1% | 2,189 | 54 | 2.5% |
| FY1992 | 21,160 | 1,902 | 9.0% | 1,790 | 67 | 3.7% |
| FY1991 | 16,326 | 2,073 | 12.7% | 1,308 | 52 | 4.0% |
All lenders, status as recorded by SBA at 30 Jun 2026. Years after FY2021 are not shown because the loans are too young. The most recent years shown will still rise as their loans age.
How to read a rate on this site
- It always sits beside the program-wide rate for the same approval years (6.6% for 7(a), 1.2% for 504). The comparison is the point; the number alone is not.
- It describes the loans a lender holds today. SBA lists each loan under its current lender, so a bank that bought another bank carries that bank's old loans.
- It reflects what was financed. Small working-capital loans to new businesses are charged off more often than property loans to established ones, in every lender's book. 504 loans, which finance real estate, show far lower rates than 7(a) loans.
- Tables on this site are sorted by volume, never by charge-off rate, and the site draws no conclusion about any lender from it.