Data
SBA Default Rates by Industry
How often SBA 7(a) acquisition loans actually go bad, by industry. Computed from loan-level SBA data, on loans old enough to have failed.
What the Numbers Say
Across the 20 industries with enough seasoned loans to measure, 169 of 4,809 acquisition loans have been charged off: a pooled rate of 3.51%. The spread underneath that average is the useful part. The riskiest industry on this page charges off at 10.66%, 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.
Charge-Off Rate by Industry
Fitness and Recreational Sports Centers
21 of 197 seasoned loans · median loan $303,750
Drycleaning and Laundry Services (except Coin-Operated)
9 of 164 seasoned loans · median loan $422,000
Offices of Chiropractors
6 of 123 seasoned loans · median loan $293,200
Plumbing, Heating, and Air-Conditioning Contractors
6 of 137 seasoned loans · median loan $735,000
Pharmacies and Drug Stores
4 of 136 seasoned loans · median loan $1,100,000
Convenience Stores
3 of 116 seasoned loans · median loan $476,000
Home Health Care Services
3 of 120 seasoned loans · median loan $705,900
Beauty Salons
3 of 148 seasoned loans · median loan $270,000
Hotels (except Casino Hotels) and Motels
7 of 556 seasoned loans · median loan $2,671,000
Gasoline Stations with Convenience Stores
1 of 268 seasoned loans · median loan $1,223,600
| Industry | Charge-Off Rate | Seasoned Loans | Median Loan | Guide |
|---|---|---|---|---|
| Fitness and Recreational Sports Centers | 10.66% | 21 / 197 | $303,750 | Full Guide |
| Snack and Nonalcoholic Beverage Bars | 7.03% | 9 / 128 | $350,000 | Full Guide |
| Full-Service Restaurants | 5.76% | 42 / 729 | $427,600 | Full Guide |
| Drycleaning and Laundry Services (except Coin-Operated) | 5.49% | 9 / 164 | $422,000 | Full Guide |
| Offices of Chiropractors | 4.88% | 6 / 123 | $293,200 | |
| Landscaping Services | 4.51% | 6 / 133 | $500,000 | Full Guide |
| Plumbing, Heating, and Air-Conditioning Contractors | 4.38% | 6 / 137 | $735,000 | Full Guide |
| Limited-Service Restaurants | 4.31% | 27 / 627 | $370,000 | Full Guide |
| General Automotive Repair | 3.50% | 7 / 200 | $591,700 | Full Guide |
| Insurance Agencies and Brokerages | 3.47% | 5 / 144 | $760,500 | Full Guide |
| Pharmacies and Drug Stores | 2.94% | 4 / 136 | $1,100,000 | |
| Convenience Stores | 2.59% | 3 / 116 | $476,000 | |
| Home Health Care Services | 2.50% | 3 / 120 | $705,900 | |
| Beauty Salons | 2.03% | 3 / 148 | $270,000 | |
| Beer, Wine, and Liquor Stores | 1.48% | 6 / 405 | $623,500 | Full Guide |
| Child Day Care Services | 1.28% | 3 / 234 | $783,000 | Full Guide |
| Hotels (except Casino Hotels) and Motels | 1.26% | 7 / 556 | $2,671,000 | |
| Car Washes | 0.86% | 1 / 116 | $1,231,900 | Full Guide |
| Gasoline Stations with Convenience Stores | 0.37% | 1 / 268 | $1,223,600 | |
| Offices of Dentists | 0.00% | 0 / 128 | $740,800 | Full Guide |
Charge-Off Rate by Franchise Brand
Anytime Fitness
4 of 42 seasoned loans
Subway
5 of 113 seasoned loans
Quality Inn by Choice Hotels
1 of 54 seasoned loans
Best Western - Membership Agre
0 of 32 seasoned loans
Days Inn by Wyndham
0 of 37 seasoned loans
Smartstyle
0 of 30 seasoned loans
Super 8 by Wyndhan
0 of 34 seasoned loans
Supercuts
0 of 35 seasoned loans
The UPS Store
0 of 50 seasoned loans
| Franchise Brand | Charge-Off Rate | Seasoned Loans |
|---|---|---|
| Anytime Fitness | 9.52% | 4 / 42 |
| Subway | 4.42% | 5 / 113 |
| Quality Inn by Choice Hotels | 1.85% | 1 / 54 |
| Best Western - Membership Agre | 0.00% | 0 / 32 |
| Days Inn by Wyndham | 0.00% | 0 / 37 |
| Smartstyle | 0.00% | 0 / 30 |
| Super 8 by Wyndhan | 0.00% | 0 / 34 |
| Supercuts | 0.00% | 0 / 35 |
| The UPS Store | 0.00% | 0 / 50 |
How This Is Computed
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.
More Reference Data
Everything here is educational information, not financial, legal, tax, or investment advice. Figures are estimates or cited third-party data; verify anything that matters against primary sources and your own advisors before acting on it.