SBA Loan Data | Failure & Success Rates Reviewed

What is the SBA

The U.S. Small Business Administration, commonly referred to as the SBA, is the only cabinet-level federal agency fully dedicated to supporting small businesses and entrepreneurs from counseling to capital. Many small businesses turn to the SBA for loans, as SBA loans typically have lower rates and longer durations compared to other traditional bank loans.

SBA 7(a) Loan Program

The SBA’s most popular loan program is the 7(a) loan for small businesses. The 7(a) loan provides financial assistance for entrepreneurs starting a new business or acquiring, operating, or expanding an existing business. The loans must be approved by the SBA.

SBA Data Analysis

Vetted Biz has reviewed and analyzed the SBA 7(a) loan approvals from the fiscal years  2010-2020. The records were obtained through SBA’s official website.

In total, 588,053 small businesses in the U.S. were approved for the SBA 7(a) loan from 2010 to 2020. These businesses are categorized by the North American Industry Classification System, NAICS, that consists of 1,913 classifications. The SBA loan failure rate by NAICS industry code is not statistically significant given the low number of loan issuances in many of the classifications and misclassifications. 

SBA Analysis of All Businesses

Of the 588,053 businesses approved for a 7(a) loan, over 53,377 of these businesses were franchise concepts representing roughly 9.08% of approved loans, while the remaining 534,676 loans were issued to non-franchised businesses, or 90.92% of approved loans.

Many of the businesses these loans were previously issued to had different NAICS classifications for each individual loan. Therefore, the Vetted Biz analytics team recategorized these businesses by 14 industries that more accurately reflect the business nature of the concept. Listed below is the count of loans approved for each industry. Note that the Other Business industry only consists of one business; thus, this industry will be excluded from future analysis since there were no loans classified under this industry.


Total Business Industries Receiving SBA 7(a) Loan Approval from 2010-2020

Industry Breakdown

IndustryTotal Loans
Food and Beverage84,797
Retail Products and Services55,654
Healthcare Services47,048
Business Services43,623
Health and Beauty22,693
Cleaning and Maintenance21,956
Travel and Hospitality15,797
Fitness Centers13,785
Real Estate10,198
Education Programs7,986
Children Programs7,662
Home Services2,111
All Industries357,877

Industries Receiving SBA 7(a) Loan Approval for Businesses from 2010-2020


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From 2010 to 2020, SBA loans for all businesses within the 7(a) loan program under the Food and Beverage industry had the highest percentage of loans approved with a rate of 23.64%. The Retail Products and Services industry came in second with 15.63% of the total loans approved and the Healthcare Services industry in third, with 13.00% of total loans approved.

SBA Loan Failure Rate by Business Industry

Further analysis was conducted based on the loan status by business industry. The loan status categories are listed below. Note that the most important loan statuses to understand for this analysis is Paid In Full and Charged Off.

SBA Loan Statuses

  • Paid in Full: loan has been repaid in full, including all principal and interest payments
  • Charged Off: loan no longer has reasonable expectation of further payment after default
    • Default: loan payment has been overdue for 90 days
  • Commit: loan not disbursed, also labelled as “Not Funded”
  • Cancelled: loan is cancelled by borrower, or occasionally by SBA, if description does not follow terms of use
  • Exempt: loan is exempt from disclosure under FOIA Exemption 4, which protects “trade secrets and commercial or financial information obtained from a person privileged or confidential”; also includes outstanding loans

The best loan status reflecting financial health of the business is Paid in Full, as the business has already paid off the loans and all interest. In contrast, the worst loan status is Charged Off, as the loan has been defaulted and further collection of debt is doubtful. The SBA recognizes this as a loss and writes the account off from its active accounts receivable.

SBA Loan Status per Industry


Vetted Biz reclassified the 500+ NAICS industries into 14 industries for the franchises studied. Within each industry, we studied the rate of the two most important loan statuses, Paid in Full and Charged Off Rate. Below you can find the adjusted results of both for each industry with a further breakdown of how many businesses in those industries had that loan status. Adjusted results exclude loans that were “Committed” or “Cancelled” due to the fact that these loans ended before they were ever disbursed by the lender.

From 2010 to 2020, SBA loans within the Healthcare Services industry had the highest Paid in Full rate and one of the lowest Charged Off rates. The Healthcare Services industry is largely dominated by urgent care centers, medical staffing companies, and senior care centers.


Some industries at the same time, have a wider gap between businesses that are doing well and those that are not. In other words, more risk can equal more reward. For example, the Retail Products and Services industry has one of the highest Paid in Full rates, but it also has a high Charged Off rate. On the other hand, industries that have lower Paid in Full rates such as the Children Programs and Travel and Hospitality industries, also have lower Charged Off rates.


When exploring optimal businesses to invest in, prospective small business owners must keep in mind the industry as a whole. Reviewing the SBA 7(a) loans is one of many factors to consider when analyzing the success of small business industries.

Paid in Full Rate

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Charged Off Rate (%)

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Industry Breakdown

IndustryPaid in full
Food and Beverage29,760
Retail Products and Services20,871
Healthcare Services18,582
Business Services17,137
Health and Beauty8,142
Cleaning and Maintenance7,968
Travel and Hospitality5,473
Fitness Centers4,088
Real Estate3,569
Education Programs2,754
Children Programs2,314
Home Services710
All Industries129,895

Industry Breakdown

IndustryCharged off
Food and Beverage3,410
Retail Products and Services2,454
Healthcare Services1,601
Business Services1,142
Health and Beauty862
Cleaning and Maintenance721
Travel and Hospitality451
Fitness Centers318
Real Estate283
Education Programs170
Children Programs142
Home Services81
All Industries12,520

Paid in Full to Charged Off Ratios

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Loan Success Rate

From 2010 to 2020, SBA loans within the Real Estate industry had the highest Paid in Full to Charged Off ratio, where for every 21 small businesses that paid their loans off in full, one of them charged off on their loans. Similarly, the Travel and Hospitality industry, which encompasses tourism agencies and lodging facilities, also had a relatively high ratio where for approximately every 17 businesses that paid their loans off in full, one charged off on their loans. 

Beyond the Real Estate and Utility industries, the average Paid in Full to Charged Off Ratio of all industries fall around 11 businesses that paid in full, to one that then charged off on their loans. Additionally, the Retail Products and Services and Food and Beverage industries had the lowest ratio, where for roughly every 8 businesses that paid their loans off in full, 1 business eventually charged off on their loans.

When prospective business owners are studying the best industries to invest in, beyond looking at separate numbers and loan statuses in general, it is important to understand how the industry functions as a whole. With that in mind, the Paid in Full to Charged Off ratio allows for an extensive insight into how industries and their SBA loans in general are doing that are helpful in guiding the franchisee on the best franchises to consider investing in.


Investing in Franchised vs. Non-Franchised Concepts

Another factor to consider when investing in a small business that is SBA eligible is whether the business is a franchise concept. Vetted Biz has carried out another study that analyzes the SBA 7(a) program among franchised concepts and non-franchised concepts.

Further details on how franchised and non-franchised concepts performed within each industry can be found published on Vetted Biz where an in-depth analysis on either business structure and their industry performance has been conducted.

Limitations and Future Research

Of these small businesses, around 45% had exempt loan status. Therefore, most of these businesses were not able to disclose whether they had Paid in Full, Cancelled, or Charged Off. Although additional information on what a loan’s exempt status encompasses can be found on a separate report, this nevertheless limits an accurate analysis of SBA business success overall.

In the FOIA 7(a) Report, most businesses from the same concept were labelled with many different NAICS classifications. For example, Subway, the franchise with the most units in the U.S., had four different NAICS classifications. Vetted Biz cleaned the data for this report to ensure the same business concept is categorized in the same industry.

Furthermore, some industries like Home Services and Education Programs only had a few hundred businesses with loan approvals compared to most industries that had a few thousand. Therefore, one or two businesses in smaller industries that had a Charged Off loan status would have a greater impact on the Charged Off Rate. 

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