7(a) lending passed its stimulus-era peak in FY2025 — microlending went the other way

In fiscal 2021, the SBA's flagship 7(a) program approved $36.5 billion in loans — a record built on emergency supports. In fiscal 2025 the program approved $37.3 billion and set a new one. The difference is what stood behind each number.

FY2021's peak was engineered. FY2025's wasn't.

The FY2021 record did not happen under normal program rules. Pandemic-era legislation temporarily raised 7(a) guarantees to 90 percent, waived borrowers' upfront guaranty fees, and had the SBA make months of payments on qualifying loans. For a lender that meant more protection on every dollar approved; for a borrower, meaningfully cheaper credit. Demand responded the way you would expect, and the program cleared $36.5 billion — a level it had never approached. In the 35 fiscal years of activity-report data back to FY1991, no other year to that point had crossed even $26 billion.

The supports expired, and the program promptly gave the surge back: FY2022 fell to $25.7 billion, roughly the pre-pandemic run rate. What followed is the more interesting story. FY2023 reached $27.5 billion, FY2024 $31.1 billion, and FY2025 $37.3 billion — past the stimulus-era peak, at standard fees and standard 75-85 percent guarantees. The program has now done on ordinary economics what it previously took emergency terms to do.

Twice the loans, two-thirds the ticket

The dollar comparison understates the change, because the two peaks were built differently. FY2021's $36.5 billion rode on 51,856 loans — an average approval around $705,000, tilted toward the larger credits the enhanced terms attracted. FY2025's $37.3 billion came across 78,078 loans, an average around $478,000.

Set against the FY2020 trough, when regular 7(a) approvals fell to 42,298 as the pandemic — and the Paycheck Protection Program — pulled demand sideways, the annual loan count has nearly doubled in five years. However you weigh dollars against units, more approvals means more businesses reached. FY2025's record is broader, not just taller.

Microlending missed the recovery

One program went the other way. SBA microloans — capped at $50,000 and delivered through nonprofit intermediary lenders, at an average around $16,000 in FY2025 — peaked in fiscal 2023 at 5,585 loans and $87.3 million. By FY2025 they had fallen to 4,532 loans and $72.6 million: dollars below even their FY2021 level of $75.2 million, over the same two years in which headline 7(a) lending climbed from $27.5 billion to a record.

That divergence deserves more attention than it gets, because microloans serve the borrowers the headline number does not: startups and very small firms that need $15,000, not $478,000 — reached largely through CDFIs and mission lenders, the institutions structured to originate at that size. A record 7(a) year beside a shrinking microloan program says the recovery's momentum is not carrying to the smallest end of the market on its own.

The operating question

The FY2025 record was earned on throughput: more approvals per lender, faster cycles, servicing books that absorbed near-double volume. Small-dollar lending is where that pressure lands hardest, because the cost of originating a $16,000 loan is not proportionally smaller than the cost of a $400,000 one — which is precisely why microloan volume can shrink while the flagship program booms. Closing that gap is an operations-and-technology problem before it is a funding problem, and that operating capacity is what CircumFi is building for community lenders.

About the data

Figures come from two official SBA sources, both as of September 30, 2025: the SBA's Approvals by Congressional District report (the FY2021-FY2025 program totals and all microloan figures — microloan data in that report is state-level only) and the SBA 7(a) and 504 Monthly & Yearly Activity Report (the FY1991-FY2025 yearly series charted above). All numbers are SBA-approved amounts, not disbursements; some approved loans are later canceled or reduced. Note the report basis: our FY2025 lender growth analysis and the lender leaderboards are computed from the SBA's Lender Detail reports, which put FY2025 at 77,954 loans and $37.1 billion; the congressional-district and yearly-activity basis used here records 78,078 loans and $37.3 billion. The bases differ slightly in scope and timing, so each page names the one it uses.