Sizing up Small-Dollar Loans to Small Businesses

April 12, 2024

Through the 7(a) Loan Program, the U.S. Small Business Administration (SBA) provides qualified small businesses up to a maximum of $5 million to keep moving forward. However, according to the National Association of Government Guaranteed Lenders (NAGGL), it is small-dollar loans that are in the biggest demand:
 
By the Numbers in 2023

• Loans $50,000 or less accounted for almost 30% of all SBA 7(a) loan approvals
• More than half of SBA 7(a) loans made were for $150,000 or less
• SBA loans totaling $500,000 or less represented more than 75% of loans approved
• Less than 6% of small business loans approved were for amounts greater than $2 million

 
While reports indicate that these trends will continue in 2024, most large banks are shying away from small-dollar loans for reasons ranging from time and resources required to process and service them, perceived risk and/or expected ROI, leaving a vital segment of the economy unsure where to turn when the need for capital arises.
 
As a community bank dedicated to assisting the underserved and supporting the growth of neighborhood businesses, BayFirst has not only made small-dollar lending throughout Tampa Bay a priority but is also emerging as a nationwide leader in this lending space with the rollout and success of its BOLT loan, specifically designed to get up to $150,000 in working capital into the hands of qualified business owners in days, not weeks.
 
As small-dollar loans continue to play a crucial role in the success of small businesses and our nation’s economy, it’s more important than ever that business owners in need turn to a trusted lender specializing in low-balance loans to avoid falling victim to predatory lenders offering unfair terms. We are proud to have helped thousands of small businesses do just that, having funded nearly 2,500 loans totaling more than $321 million in 2023 alone.
 
Interested in a small-dollar business loan from BayFirst? Learn more about our BOLT loan here and complete our form to prequalify. We look forward to seeing just how big of a difference a small-dollar loan can make for your business.