SBA Default Rates by Industry
What the Data Says
Across the 20 industries with enough seasoned loans to measure, 202 of 4,809 acquisition loans have been charged off: a pooled rate of 4.20%. The spread underneath that average is the useful part. The riskiest industry on this page charges off at 12.18%, and several land near zero. Same loan program, same buyer profile, an order of magnitude apart.
Read the ordering, not the level. These rates count loans already written off; loans still open can still fail, so every number here is a floor rather than a final tally. Underwrite a Deal reads a target's industry rate back to you beside its coverage, so the risk sits next to the payment it has to survive.
Charge-Off Rate by Industry
| Fitness and Recreational Sports Centers | 12.18% | 24 / 197 | $303,750 |
| Snack and Nonalcoholic Beverage Bars | 7.81% | 10 / 128 | $350,000 |
| Drycleaning and Laundry Services (except Coin-Operated) | 7.32% | 12 / 164 | $422,000 |
| Full-Service Restaurants | 6.72% | 49 / 729 | $427,600 |
| Offices of Chiropractors | 5.69% | 7 / 123 | $293,200 |
| Limited-Service Restaurants | 5.58% | 35 / 627 | $370,000 |
| Plumbing, Heating, and Air-Conditioning Contractors | 5.11% | 7 / 137 | $735,000 |
| General Automotive Repair | 5.00% | 10 / 200 | $592,850 |
| Landscaping Services | 4.51% | 6 / 133 | $500,000 |
| Pharmacies and Drug Retailers | 3.68% | 5 / 136 | $1,100,000 |
| Insurance Agencies and Brokerages | 3.47% | 5 / 144 | $760,500 |
| Convenience Retailers | 3.45% | 4 / 116 | $476,500 |
| Beauty Salons | 2.70% | 4 / 148 | $270,000 |
| Home Health Care Services | 2.50% | 3 / 120 | $705,550 |
| Beer, Wine, and Liquor Retailers | 1.98% | 8 / 405 | $742,500 |
| Hotels (except Casino Hotels) and Motels | 1.44% | 8 / 556 | $2,677,000 |
| Child Day Care Services | 1.28% | 3 / 234 | $701,500 |
| Car Washes | 0.86% | 1 / 116 | $1,231,900 |
| Gasoline Stations with Convenience Stores | 0.37% | 1 / 268 | $1,412,300 |
| Offices of Dentists | 0.00% | 0 / 128 | $740,800 |
Charge-Off Rate by Franchise Brand
| Anytime Fitness | 14.29% | 6 / 42 |
| Subway | 5.31% | 6 / 113 |
| Quality Inn | 3.70% | 2 / 54 |
| The UPS Store | 0.00% | 0 / 50 |
| Supercuts | 0.00% | 0 / 35 |
| Super 8 by Wyndhan / Super 8 | 0.00% | 0 / 34 |
| SmartStyle | 0.00% | 0 / 30 |
| Days Inn / Days Inn by Wyndham | 0.00% | 0 / 37 |
| Best Western - Best Western Plus - Best Western Premier- Executive Residency by Best Western- @Home by Best Western - GLo - Aiden - Membership Agreement | 0.00% | 0 / 32 |
Method & Source
Every rate comes from the SBA's loan-level 7(a) disclosure, not from a survey or an aggregator. The cohort is FY2018-19 change-of-ownership approvals (7-8 years seasoned): loans old enough that a failure would already have shown up as a charge-off.
Rates computed over recent loans are the common mistake. A loan approved last year has barely had time to go bad, so a recent cohort makes every industry look safe and makes the safest ones indistinguishable from the riskiest. That is why the numbers above deliberately exclude the newest loans, even though there are far more of them.
An industry needs 100 seasoned loans to appear here, and a franchise brand needs 30. Below that, a single default swings the rate by several points, and a ranking of small samples is a ranking of noise. Industries that miss the cut are left out rather than published with a number we would not trust. The pooled rate is computed from summed loans and charge-offs, so a large industry counts more than a small one.
Charge-off rates come from the seasoned cohort only; FY2020+ loans are too young to have defaulted. Rates are a lower bound (open loans can still fail), so read the ordering, not the level.
Source: SBA 7(a) and 504 FOIA data. Loans are limited to change-of-ownership approvals, which is what a buyer is actually taking on.
Each rate carries the loan count behind it, because a rate without its denominator is a rumour.