SBA Lenders Market Share Report

Market share for the top 25 SBA lenders

 

We analyzed SBA loan data from 2017 to 2022 and tabulated the numbers below. A few of our takeaways from this report:

  • The top 25’s share of the market remained fairly stable – roughly 35% to 40% per year.
  • SBA loan volume increased 65% over the past five years.
  • Only six banks were able to grow market share relative to peers during this period (i.e., above 65% market growth): Readycap, Bank of George, Cadence, Harvest, First Bank of the Lake, and Peoples Bank. The remaining 19 banks experienced relative market share declines.
  • Wells Fargo, the top SBA lender in 2018, has dramatically shifted its focus away from SBA lending.
  • The biggest four banks in America (JPMorgan, Citi, BofA, and Wells Fargo) account for ~ 33% of bank deposits, but only BofA and Wells made the top 25 even though their customer bases are multiples larger than others in the top 25.

 

RankSBA Lender2022202120202019201820175 Yr Growth
1Live Oak Banking7.2%6.8%7.6%6.1%4.3%5.8%25%
2Huntington National Bank4.4%2.5%2.4%3.4%3.6%4.0%10%
3Newtek Small Business Finance3.4%2.0%1.1%2.8%2.6%2.2%56%
4Celtic Bank2.6%2.1%2.5%2.2%1.6%1.8%45%
5Byline Bank1.9%1.8%2.0%2.6%2.1%1.9%-1%
6Readycap Lending1.8%1.6%1.2%1.2%1.0%0.6%201%
7Wells Fargo Bank1.6%1.7%2.8%6.1%5.0%7.4%-79%
8BayFirst National Bank1.6%0.5%0.5%1.8%1.3%1.4%16%
9GBank d/b/a Bank of George1.2%0.8%1.1%0.7%0.5%0.4%229%
10Cadence Bank1.2%0.7%0.7%0.9%0.8%0.5%125%
11Harvest Small Business Finance1.1%1.2%1.6%0.6%0.7%0.6%99%
12First Bank of the Lake1.1%0.6%0.7%0.1%0.1%0.1%628%
13Commonwealth Business Bank1.1%1.0%0.9%0.7%0.8%0.9%12%
14Enterprise Bank & Trust1.0%1.3%2.0%1.5%1.5%1.2%-16%
15Bank of America1.0%0.5%0.3%0.9%0.9%0.7%36%
16TD Bank1.0%1.0%0.9%1.1%1.4%1.7%-45%
17Hanmi Bank1.0%0.5%0.5%0.5%0.4%0.7%46%
18Berkshire Bank0.9%0.8%1.0%1.0%0.9%0.7%33%
19KeyBank0.9%1.1%1.5%1.6%1.6%1.6%-44%
20Open Bank0.8%0.7%1.0%1.0%0.9%0.8%10%
21U.S. Bank0.8%1.1%1.3%1.9%1.2%1.1%-29%
22M&T0.8%0.6%0.7%0.9%0.8%0.7%9%
23Bank of the West0.8%0.9%1.3%1.0%1.2%1.3%-41%
24Peoples Bank0.7%0.8%0.6%0.3%0.2%0.1%466%
25Pinnacle Bank0.7%0.9%0.8%0.8%0.7%0.7%8%
Top 25 % of All SBA Loans41%34%37%42%36%39%4%
Total SBA Lending/Growth$20.2B$29.3B$16B$14.8B$13.9B$12.3B65%

 

Top SBA lender in each state (based on # of SBA loans created)

 

Many banks in the United States have a geographical focus to comply with regulations, better understand their customer base, manage risk, and build relationships within their local communities. This local focus explains why the leading lender based on number of consummated loans is typically a bank with a statewide focus, except for U.S. Bank and Huntington, which are leaders in smaller loans in markets where they have a physical presence.Top SBA lender in each state (based on number of SBA loan)

 

Top SBA lender in each state (based on total SBA loan dollars)

 

Pure-play SBA-focused banks, such as Live Oak and Celtic, have national or close to national footprints. Instead of a geographical focus, pure-play SBA lenders tend to focus on traditionally lucrative industries for SBA loans — larger loan size and higher volume. For example, pure plays like Live Oak and Celtic have average loans of $1.5M and $800K, respectively, traditional banks that also do SBA lending like U.S. Bank and Huntington have average loans of $132K and $213K, respectively. As a result, the top lender by state looks much different when viewed by total dollars lent:

 

Top SBA lender in each state (based on total SBA loan dollars)

Economic impact of top 25 SBA lenders

 

As clearly demonstrated by the table below, smaller SBA loans are more efficient at supporting jobs in a community than larger SBA loans.

Small SBA loans — under $500,000 or so¬† – are typically utilized to cover working capital needs — such as inventory, payroll, and rent — or expanding employment. In contrast, larger loans are often used for capital investments, such as purchasing equipment, real estate, or an acquisition of an entire business. While these investments may also lead to job creation, they do not support as many jobs on a relative basis as smaller loans.

A comparison of M&T (average loan of $163K and loan/jobs ratio of $27K) to Bank of George (average loan of $2.4M and loan/jobs ratio of $541k) highlight the capital efficiency of smaller loans. Because BofG focuses primarily on lending to finance hotel acquisitions, which are real estate heavy and frequently do not materially change employment post-acquisition), BofG’s loan/jobs ratio is 19 times higher than M&T’s.

 

RankSBA LenderAvg LoanJobsLoan/Jobs
1M&T$163,4405,614$27,570
2U.S. Bank$132,1445,191$30,700
3BayFirst National Bank$277,25210,357$30,705
4TD Bank$131,6826,315$30,903
5Huntington National Bank$213,69828,268$31,494
6Cadence Bank$324,8637,504$32,556
7Bank of America$430,0104,971$41,349
8KeyBank$349,1294,159$42,644
9Newtek Small Business Finance$658,41815,597$43,650
10Wells Fargo Bank$247,7675,813$54,728
11Bank of the West$1,013,2362,406$63,590
12Byline Bank$1,230,0865,654$66,356
13Pinnacle Bank$1,172,8362,191$67,447
14Readycap Lending$465,4375,276$70,221
15Berkshire Bank$1,146,2612,703$70,820
16Enterprise Bank & Trust$1,212,1982,855$73,029
17First Bank of the Lake$1,376,1722,830$76,832
18Live Oak Banking$1,517,24117,501$83,227
19Harvest Small Business Finance$1,107,8222,655$86,373
20Celtic Bank$834,3706,032$88,389
21Peoples Bank$1,105,5451,692$89,515
22Hanmi Bank$1,190,8551,607$120,049
23Commonwealth Business Bank$1,285,5481,349$159,145
24Open Bank$2,098,391824$203,727
25GBank d/b/a Bank of George$2,421,664461$541,066

Top SBA lenders ranked based on population segment

 

The US government defines metropolitan, micropolitan, and rural/small town areas based on the size of their population and their proximity to urban centers. These definitions are used by various government agencies to allocate resources and funding, among other purposes.

  1. Metropolitan: Metropolitan areas are defined as having a population of at least 50,000 people and an urban core of at least 50,000 people. They may include one or more counties, and are typically characterized by a high degree of economic and social interconnectedness.
  2. Micropolitan: Micropolitan areas are defined as having a population of at least 10,000 people but less than 50,000 people, and an urban core of at least 10,000 people. They may include one or more counties, and are typically less interconnected than metropolitan areas.
  3. Rural/small town: Rural areas are defined as having a population of less than 10,000 people and not located within a metropolitan area. Small town areas are generally considered to be a subset of rural areas, with populations ranging from a few hundred to several thousand people.

Not surprisingly, the banks focused on SBA lending did very well lending in urban and rural environments alike:

 

SBA BankMetroMicroRural
Live Oak Banking Company111
The Huntington National Bank253
Newtek Small Business Finance, Inc.346
Celtic Bank Corporation422
Byline Bank57**
Readycap Lending, LLC6104
Wells Fargo Bank, National Association718**
BayFirst National Bank81311
Harvest Small Business Finance, LLC9****
Cadence Bank101518
Commonwealth Business Bank148**
GBank d/b/a Bank of George1635
America First FCU****9
First Financial Bank**148
Hiawatha National Bank****7
Open Bank**9**
Peoples Bank**610
** Not ranked in top 20

 

SBA lending appears to mirror the population areas defined above. For example, metropolitan areas were 87% of all loan issued and 84% of the U.S. population.

 

Area Definition# of Loans%Total Loan $$$%Pop.
Metropolitan27,81787%$16,576,370,30088%84%
Micropolitan2,2637%$1,370,095,3007%10%
Rural/Small Town1,7275%$987,814,2005%6%