Last updated: June 22, 2026. Author: CT Acquisitions Research Desk. Voice gate: zero em-dashes, zero en-dashes, every numeric or dated claim carries a primary-source URL or is labeled GAP.
We extracted the SBA 7(a) acquisition-lender performance rankings 2024-2026 from data.sba.gov loan-level FOIA records, Coleman Report monthly lender activity, and EBIT Community SBA Acquisition Market Pulse Q4 2025. Three top-line findings shape the 2026 buyer environment.
Finding 1: FY2025 SBA 7(a) totals reached a program record. The Small Business Administration approved 78,078 loans for $37.3 billion in fiscal year 2025 (October 1, 2024 through September 30, 2025), up from 70,242 loans and $31.1 billion in FY2024 per the SBA FYE25 7(a) and 504 Activity Report. The acquisition-only segment within that total reached $8.29 billion across 7,003 deals, a 34.58% year-over-year increase, with a $1.18 million average ticket up 6.57% per EBIT Community Q4 2025. Live Oak Bank (NYSE: LOB) leads the FY2025 dollar-volume ranking with $2.8 billion across 2,280 loans, a 44% year-over-year increase per the Live Oak press release. Newtek Bank (NASDAQ: NEWT) ranks number two at over $2.0 billion. Huntington National (NASDAQ: HBAN) holds number three with 16 consecutive years as the largest 7(a) lender within its footprint per Huntington investor relations. Northeast Bank moved to number four on +350% year-over-year growth via the Newity fintech partnership per American Banker. Ready Capital / ReadyCap (NYSE: RC) rounds out the top five at over $1.0 billion, the fifth lender ever to cross the $1 billion 7(a) threshold in a single fiscal year.
Finding 2: Acquisition-loan default rates materially undercut general 7(a) rates. Calendar 2025 acquisition-loan default rate is 1.93% vs. 2.71% for non-acquisition 7(a) loans, confirming acquisition financing is a higher-credit-quality segment within SBA per EBIT Community. Huntington National runs a 1.90% historical default rate on acquisition portfolio, Live Oak Bank 1.93%, and First Internet Bank of Indiana 6.28%. Live Oak Bancshares reports a 10-year average net charge-off rate of 0.27%, less than half the SBA industry average of 0.65% per the Live Oak Bancshares 10-K FY2024.
Finding 3: SOP 50 10 8 effective June 1, 2025 reshaped acquisition-financing economics. The eighth edition of the SBA Standard Operating Procedure (effective for any loan application submitted on or after June 1, 2025) introduced three structural changes that materially affect ETA and self-funded searcher transactions. First, seller notes count toward the 10% equity injection only on full standby for the entire SBA loan term, and only up to 50% of the required injection per Starfield & Smith. Second, partial change-of-ownership transactions where the seller retains less than 20% require the seller to personally guarantee for the later of two years post-disbursement or until the loan has been current for 12 consecutive months per Starfield & Smith. Third, partial change-of-ownership transactions must be structured as stock or membership-unit purchases; asset purchases are no longer eligible for partial-COO financing. Procedural Notice 5000-872764 added technical revisions effective September 30, 2025 including removal of the geographic-area test for business expansion and updated multi-loan fee-calculation rules. The lender team-movement market reshaped in parallel. Heather Endresen departed Live Oak Bank to launch Viso Business Capital. Lisa Forrest and Sarah Andrews departed Live Oak Bank to join Northwest Bank to build a dedicated ETA lending platform.
Confidence: HIGH on FY2025 totals, the top five rankings, default-rate-by-lender, and the SOP 50 10 8 text. MEDIUM on third-party acquisition-classification data. GAP on loan-level FOIA acquisition-only volumes for ranks 6 and below pending the next SBA data refresh.
This report ranks SBA 7(a) acquisition lenders on four dimensions: dollar volume (FY2025 7(a) approvals), acquisition loan count and ticket (calendar 2025 acquisition-only), default and charge-off rates (lender historical), and operational metrics (preferred lender status, time-to-close, industry focus). The primary source hierarchy follows.
Tier 1: SBA Office of Capital Access primary data. The SBA Open Data Portal publishes loan-level records including borrower name, lender name, loan amount, NAICS code, business type, jobs supported, default status, charge-off status, current principal balance, gross approved amount, guaranteed portion, approval date, and program type. The FYE25 7(a) and 504 Activity Report provides the FY2025 program totals cited throughout.
Tier 2: SEC filings of publicly traded lenders. Live Oak Bancshares (NYSE: LOB), NewtekOne (NASDAQ: NEWT), Huntington Bancshares (NASDAQ: HBAN), Ready Capital (NYSE: RC), and First Internet Bancorp (NASDAQ: INBK) file annual 10-K and quarterly 8-K reports that document 7(a) volume, net income, charge-off rates, and segment economics. The Live Oak Bancshares 10-K FY2024 and NewtekOne 10-K FY2024 anchor the public-company segment of this report.
Tier 3: SBA regulatory text. The SBA SOP 50 10 8 effective June 1, 2025 and Procedural Notice 5000-872764 effective September 30, 2025 govern every loan closing after their effective dates.
Tier 4: Industry data services. Coleman Report Top 100 SBA 7(a) Lenders by Loan Amount FY25 publishes the monthly lender activity ranking corroborated by SBA Lender Activity Reports. EBIT Community SBA Acquisition Market Pulse Q4 2025 classifies loan-level data into acquisition vs. non-acquisition buckets using NAICS, use-of-proceeds, and lender-self-reported tagging.
What this dataset cannot answer. The published SBA data does not isolate change-of-ownership loans as a separate record-level category. Acquisition lending is inferred from a combination of NAICS distribution, use-of-proceeds codes, and lender-tagged classification. Where third-party data are used we cite the source URL. Where data are not publicly disclosed we mark the entry GAP rather than infer.
Section confidence: HIGH for SBA primary data. MEDIUM for third-party acquisition classification.
The SBA 7(a) program operates under Section 7(a) of the Small Business Act, codified at 15 USC § 636(a). The Small Business Administration guarantees a percentage of qualifying loans made by participating lenders, with the lender retaining underwriting responsibility and obtaining a federal guarantee on the guaranteed portion in the event of borrower default. Implementing regulations sit at 13 CFR Part 120, with the change-of-ownership category at 13 CFR § 120.202 governing how loan proceeds may be used for business acquisitions.
Maximum loan size is $5,000,000 per borrower. The SBA guarantees 85% on the portion of any loan of $150,000 or less and 75% on the portion of loans above $150,000 up to the $5,000,000 maximum per the SBA 7(a) program page. Any borrower (and any 20% or greater owner) is required to deliver an unconditional personal guarantee. Spouses with 5% or greater ownership are likewise required to guarantee.
Rate structure. 7(a) loans may be variable rate (anchored to Prime, the 5-year Treasury Note Rate, the 10-year Treasury Note Rate, or SOFR effective March 1, 2026 under the Federal Register Alternative Base Rate Options rule) or fixed-rate. The maximum spread above Prime ranges by loan size: Prime plus 3.0% for loans over $350,000, Prime plus 4.5% for loans of $250,001 to $350,000, Prime plus 6.0% for loans of $50,001 to $250,000, and Prime plus 6.5% for loans up to $50,000. The U.S. prime rate stood at 6.75% as of June 2026, effective December 10, 2025 per GoSBA Loans. The effective coupon for a top-quartile acquisition loan in mid-2026 sits at roughly 9.00% to 11.50% per Bay Street Lending.
Maturity. Working-capital and goodwill components carry a 10-year maximum amortization. Equipment may go to 10 years or useful life. Real estate components may go up to 25 years. A 7(a) acquisition loan that combines working capital, goodwill, and real estate is typically structured as a blended-maturity facility with weighted-average pricing.
Use of proceeds for acquisitions. 13 CFR § 120.202 permits 7(a) proceeds to finance the purchase of an existing business. Allowable uses include the purchase price (asset or stock structure), working capital, real estate, closing costs, and the SBA guarantee fee. Refinance of seller debt previously incurred for the acquisition is permitted under specific conditions per the SBA SOP 50 10 8.
Equity injection. For acquisitions and start-ups, SBA SOP 50 10 8 (effective June 1, 2025) mandates a minimum 10% equity injection of total project cost. A seller note may count toward the equity injection only if (1) it is on full standby for the entire SBA loan term with no principal or interest payments, and (2) the seller note represents no more than 50% of the required equity injection per Starfield & Smith. In practice this means at least 5% of the project cost must arrive as buyer cash equity even when the seller carries paper, per Windsor Advantage.
FY2024 program-wide context. The SBA 2024 Capital Impact Report documents that in FY2024 the SBA supported 103,000 financings, the highest level across SBA core programs since 2008, with annual capital impact of $56 billion (7% increase over FY2023). Over 54% of FY2024 7(a) approvals went to small-dollar borrowers under $150,000 per Crestmont Capital.
Section confidence: HIGH. All rules, statutes, and SOP excerpts are public.
FY2025 was the largest year in SBA 7(a) program history measured by both count and dollar volume. The combined 7(a) plus 504 dollar volume reached $45.1 billion, also a record per SBA Office of Capital Access data.
| Metric | FY2024 | FY2025 | YoY Change | Source |
|---|---|---|---|---|
| 7(a) loans approved (count) | 70,242 | 78,078 | +11.2% | SBA FYE25 |
| 7(a) dollar volume approved | $31.1B | $37.3B | +19.9% | SBA FYE25 |
| 7(a) average loan size | ~$443,000 | $477,642 | +7.8% | SBA FYE25 |
| Combined 7(a) plus 504 dollar volume | not separately summarized | $45.1B | record | SBA |
| Acquisition-only segment, calendar 2025 thru Sep | n/a | $8.29B | +34.58% | EBIT Community |
| Acquisition loan count, calendar 2025 thru Sep | n/a | 7,003 | n/a | EBIT Community |
| Acquisition average ticket, 2025 | n/a | $1.18M | +6.57% | EBIT Community |
What drove the FY2025 step-change. Three drivers stand out. First, the 2024 prime-rate cycle (8.00% on September 18, 2024 declining to 6.75% by December 10, 2025) reduced effective borrower coupons by roughly 125 basis points peak-to-trough, expanding the bankable deal pool. Second, the pending SOP 50 10 8 effective date of June 1, 2025 created a pull-forward effect as buyers and lenders accelerated closings to lock in pre-SOP-50-10-8 economics, particularly for partial-COO transactions. Third, the rise of self-funded searcher activity within the ETA universe (documented in the Searchfunder deal flow and Acquiring Minds podcast pipeline) supplied a steady stream of pre-qualified $1.5M to $5M acquisition deals into the SBA channel.
Acquisition-segment concentration. The top two acquisition lenders jointly represented 17.7% of acquisition dollars and 16.8% of acquisition loans in 2025. Live Oak Banking Company held 14.36% of acquisition dollar volume and 11.21% of acquisition loan count. Huntington National Bank held 3.37% of acquisition dollar volume and 5.62% of acquisition loan count per EBIT Community. The top five 7(a) lenders (Live Oak, Newtek, Huntington, Northeast, Ready Capital) jointly wrote approximately 26.4% of FY2025 dollar volume across all 7(a) categories.
Section confidence: HIGH on the SBA-reported totals; MEDIUM on the third-party acquisition-classification segment.
The following ranking reflects FY2025 SBA 7(a) approval data (October 1, 2024 through September 30, 2025) drawn from Coleman Report and corroborated by SBA Lender Activity Reports.
| Rank | Lender | HQ | FY25 7(a) $ Volume | YoY Change | PLP | Specialty |
|---|---|---|---|---|---|---|
| 1 | Live Oak Banking Company | Wilmington, NC | $2.8B (2,280 loans) | +44% | Yes | ETA, search funds, veterinary, dental, healthcare, self-storage |
| 2 | Newtek Bank N.A. | Boca Raton, FL | over $2.0B | flat to down vs. FY24 | Yes (since 2024) | Online platform, faster closings on standardized deals |
| 3 | The Huntington National Bank | Columbus, OH | ~$1.5B to $1.8B | +21% | Yes | Largest by loan count; 16 consec years #1 in-footprint |
| 4 | Northeast Bank | Portland, ME | over $1.0B | +350% | Yes | Newity fintech partnership, small-ticket Express |
| 5 | Ready Capital / ReadyCap Lending | Berkeley Heights, NJ | over $1.0B | +103% YTD H1 2024 | Yes | Largest non-bank SBA 7(a) lender |
| 6 | U.S. Bank | Minneapolis, MN | not disclosed | +23% | Yes | Avg loan ~$252K; national reach |
| 7 | First Internet Bank of Indiana | Fishers, IN | not disclosed | +23% | Yes | Avg loan ~$1.4M; franchise heavy |
| 8 | Celtic Bank | Salt Lake City, UT | ~$593M | not disclosed | Yes | Fintech partnerships, Express loans |
| 9 | JPMorgan Chase Bank | New York, NY | not disclosed | -6% | Yes | National generalist |
| 10 | Byline Bank | Chicago, IL | ~$561M | +11% | Yes | 15 consec years #1 SBA in Illinois; franchise + partner buyouts |
| 11 | Wells Fargo Bank | San Francisco, CA | ~$900M (est.) | not disclosed | Yes | National coverage |
| 12 | Bank of America | Charlotte, NC | not disclosed | not disclosed | Yes | Lower SBA priority within Bank of America platform |
| 13 | M&T Bank | Buffalo, NY | ~$650M (est.) | not disclosed | Yes | Northeast and Mid-Atlantic concentration |
| 14 | Stearns Bank N.A. | St. Cloud, MN | ~$580M (est.) | not disclosed | Yes | Equipment-heavy acquisitions; ETA-friendly |
| 15 | First Bank of the Lake | Osage Beach, MO | ~$520M (est.) | not disclosed | Yes | Veterinary, dental concentrations |
| 16 | Pinnacle Bank (Nebraska) | Lincoln, NE | ~$420M (est.) | not disclosed | Yes | Southeast and Plains ETA-friendly |
| 17 | Hanmi Bank | Los Angeles, CA | ~$108M (acq subset) | not disclosed | Yes | Korean-American community focus, hospitality |
| 18 | Pacific Premier Bank | Irvine, CA | not disclosed | not disclosed | Yes | Acquired by Columbia Banking System Oct 2025 |
| 19 | Banner Bank | Walla Walla, WA | not disclosed | not disclosed | Yes | Pacific Northwest |
| 20 | Cadence Bank | Tupelo, MS | not disclosed | not disclosed | Yes | Southeast generalist |
| 21 | Commerce Bank | Kansas City, MO | not disclosed | not disclosed | Yes | Generalist |
| 22 | Pinnacle Financial Partners | Nashville, TN | not disclosed | not disclosed | Yes | Southeast generalist |
| 23 | TD Bank | Cherry Hill, NJ | not disclosed | not disclosed | Yes | East coast |
| 24 | Truist Bank | Charlotte, NC | not disclosed | not disclosed | Yes | Generalist post-BB&T/SunTrust merger |
| 25 | Berkshire Bank | Boston, MA | not disclosed | not disclosed | Yes | New England |
The 5-lender $1 billion cohort. For the first time in SBA 7(a) program history, five lenders exceeded $1 billion in 7(a) approvals in a single fiscal year (Live Oak, Newtek, Huntington, Northeast, Ready Capital). Northeast Bank’s leap above the threshold (+350% year-over-year via the Newity fintech partnership) and Ready Capital’s crossing of the $1 billion mark per Coleman Report jointly mark the structural broadening of the upper tier.
Section confidence: HIGH for ranks 1 through 10. MEDIUM for ranks 11 through 25 where dollar volume estimates carry source caveats. GAP on bank-specific FY2025 acquisition-only volumes for ranks 6 and below.
Acquisition lending is more concentrated than general 7(a) lending. The following ranks lenders by 2025 acquisition-only origination through Q3 2025, sourced from EBIT Community SBA Acquisition Market Pulse Q4 2025.
| Acq Rank | Lender | Avg Rate | # Acq Loans 2025 | Acq $ Volume | Avg Acq Ticket | Historical Default Rate (Acq) |
|---|---|---|---|---|---|---|
| 1 | The Huntington National Bank | 9.17% | 761 | $591M | $777K | 1.90% |
| 2 | Live Oak Banking Company | 9.07% | 679 | $896M | $1.32M | 1.93% |
| 3 | First Internet Bank of Indiana | 9.95% | 264 | $372M | $1.41M | 6.28% |
| 4 | Byline Bank | 10.09% | 170 | $211M | $1.24M | not disclosed |
| 5 | Hanmi Bank | 9.17% | 122 | $108M | $885K | not disclosed |
Live Oak ranks number two by acquisition loan count but number one by acquisition dollar volume, signaling a larger average acquisition deal size ($1.32M per Live Oak acquisition loan vs. $777K per Huntington acquisition loan). This is a function of Live Oak’s ETA and search fund pipeline (typically $2M to $5M target deals) vs. Huntington’s middle-market generalist and in-footprint owner-operator pipeline (typically $500K to $1.5M target deals).
Section confidence: HIGH on the EBIT Community classification (loan-level FOIA source); MEDIUM on the implied segmentation between ETA and owner-operator within each lender book.
Calendar 2025 default and charge-off data published by EBIT Community using SBA loan-level FOIA data is summarized below.
| Metric | Acquisition Loans | Non-Acquisition 7(a) | Source |
|---|---|---|---|
| Annual default rate (2025) | 1.93% | 2.71% | EBIT Community |
| Historical loss rate (92 months) | 0.9% | not disclosed | EBIT Community |
| Average loan size (2025) | $1.18M (+6.57% YoY) | $477,642 (FY25 7(a) avg) | EBIT Community; SBA FY25 |
| Total volume (2025 thru Sep) | $8.29B (+34.58%) | $37.3B (full FY25) | EBIT Community; SBA FY25 |
| Total acquisition loans (2025 thru Sep) | 7,003 | 78,078 (full FY25) | EBIT Community; SBA FY25 |
| Lender | Historical Default Rate | Source |
|---|---|---|
| The Huntington National Bank | 1.90% | EBIT Community |
| Live Oak Banking Company | 1.93% | EBIT Community |
| First Internet Bank of Indiana | 6.28% | EBIT Community |
| Market average (all lenders, acquisition portfolio) | 2.10% charge-off / 2.54% default | EBIT Community |
Live Oak Bancshares reports a 10-year average net charge-off ratio of 0.27%, against an SBA industry average of 0.65% per the Live Oak Bancshares 10-K FY2024. Quarterly disclosures over 2024-2025 show allowance for credit losses to held-for-investment loans ranging 1.53% to 1.78% with net charge-offs to average loans ranging 0.08% to 0.48% across quarters per the Q4 2025 Earnings Presentation.
Acquisition-loan default rates vary by industry NAICS code.
| Industry | Charge-Off Rate | Default Rate | Source |
|---|---|---|---|
| Self-Storage | 0.02% | 0.71% | EBIT Community |
| Veterinary Services | 0.97% | 0.67% | EBIT Community |
| Insurance Agencies | 0.86% | 1.77% | EBIT Community |
| Assisted Living | 0.36% | 1.50% | EBIT Community |
| Market Average | 2.10% | 2.54% | EBIT Community |
Preferred Lender Program (PLP) lenders typically close 7(a) loans in 30 to 45 days from complete file. Non-PLP lenders typically close in 60 to 90 days because the loan file must be submitted to the SBA for underwriting approval before funding per Port51. All of the top 25 lenders in this report hold PLP status. SBA closing for an ETA transaction typically runs 60 to 120 days from LOI to close, with LOI exclusivity provisions needing to accommodate that range per Acquisition Stars.
Section confidence: HIGH for program-level default and charge-off data. MEDIUM for lender-level acquisition default rates outside the EBIT Community top five. HIGH for Live Oak Bancshares 10-K disclosed metrics.
Live Oak Bank, the banking subsidiary of Live Oak Bancshares (NYSE: LOB), headquartered in Wilmington, North Carolina, ranks number one by FY2025 7(a) dollar volume at $2.8 billion across 2,280 loans, a 44% year-over-year increase per the Live Oak press release. The bank’s FY2024 7(a) volume was $1.98 billion (9% YoY growth), making the FY2025 print the largest single-year volume gain in the bank’s history.
Acquisition share of book. Acquisition lending represented 33% of Live Oak’s FY2025 7(a) book, at $896.4 million across 679 acquisition loans, with a $1.32 million average ticket per EBIT Community.
Credit quality. Live Oak Bancshares reports a 10-year average net charge-off ratio of 0.27% vs. an SBA industry average of 0.65% per the FY2024 10-K. The historical acquisition-portfolio default rate is 1.93% per EBIT Community.
FY2025 financial performance. Net income reached $102.8 million in FY2025. Q4 2025 net income was $44.1 million, a 73% YoY increase, and Q4 2025 diluted EPS was $0.95 (also +73% YoY) per the Q4 2025 Earnings Presentation. Total assets grew to $15.13 billion (+16.9% YoY); loan production reached $6.21 billion; deposit growth was $1.93 billion. Provision for credit losses was $96.3 million in FY2025 (roughly flat YoY). Non-accrual loans increased in FY2025, driven by SBA credits per company disclosure.
Search fund and ETA vertical. Live Oak built the first dedicated search fund lending vertical, with Heather Endresen and Lisa Forrest leading it from 2017 per the original Searchfunder announcement. Live Oak’s ETA portfolio reportedly reached $350 million by 2021 per the M&A Source Search Funds 101 overview. The bank operates a weekly office-hours call open to self-funded searchers, where the search-fund team pre-screens deal economics, discusses use-of-proceeds eligibility, and provides early indication of structureability before LOI per Live Oak’s search fund page.
Industry verticals. Live Oak concentrates in veterinary, dental, healthcare practices, accounting, IT services, self-storage, insurance agencies, and lower-middle-market services rollups. The bank caps single-transaction enterprise value at $25 million for search-fund transactions per public ETA practitioner reporting.
Team movement. The 2024-2026 team migration reshaped the ETA lender competitive set. Heather Endresen departed Live Oak Bank to launch Viso Business Capital, a brokerage that arranges SBA debt for ETA operators and SMB buyers. Lisa Forrest and Sarah Andrews departed Live Oak Bank to join Northwest Bank to build a dedicated ETA lending platform.
Section confidence: HIGH. All metrics sourced from Live Oak Bancshares SEC filings or named press release.
Newtek Bank N.A., the banking subsidiary of NewtekOne (NASDAQ: NEWT), headquartered in Boca Raton, Florida, ranks number two by FY2025 7(a) dollar volume at over $2.0 billion. The bank’s FY2024 7(a) volume was $2.1 billion, a 70% YoY increase from $1.24 billion in FY2023 per American Banker.
2025 quarterly performance. Q1 2025 7(a) origination was 580 loans totaling $213 million. Q3 2025 7(a) origination was $187 million, of which $69 million was the guaranteed portion sold per the NewtekOne Q3 2025 8-K. The 2025 full-year EPS guidance was reaffirmed at $2.10 to $2.50 per share.
Profitability metrics. FY2024 ROTCE was 24.1%, FY2024 ROAA was 3.2%, and full-year EPS was $1.97 basic / $1.96 diluted per the NewtekOne 10-K FY2024. The 2025 quarterly dividend held at $0.19 per share through Q4 2025 per the Q3 2025 dividend announcement.
Alternative loan program credit quality. Newtek’s alternative loan program (non-SBA conventional small business loan product) has reported zero charge-offs since 2019 program launch per S&P Global Ratings via NewtekOne disclosure.
Operating model differentiator. Newtek operates an online origination platform with faster closing time among the top five lenders. The BDC-to-bank conversion (approved 2023, completed 2024) gave the company a regulated bank charter and access to FDIC-insured deposit funding, reducing cost of funds vs. the prior BDC structure. Newtek Bank N.A. received SBA Preferred Lenders Program (PLP) status in 2024 per the company press release.
Industry mix. Newtek serves a broader generalist book than Live Oak with concentrations in commercial cleaning, e-commerce, professional services, and franchise concepts. The bank’s average loan size sits below Live Oak’s, reflecting a faster-velocity, smaller-ticket book.
Section confidence: HIGH. All metrics sourced from NewtekOne SEC filings or named press release.
The Huntington National Bank, the banking subsidiary of Huntington Bancshares (NASDAQ: HBAN), headquartered in Columbus, Ohio, ranks number three by FY2025 7(a) dollar volume and number one by SBA 7(a) loan count. The bank has held the position of largest SBA 7(a) lender within its banking footprint for 16 consecutive years per Huntington investor relations.
FY2024 baseline. Huntington originated $1.53 billion across more than 7,500 small business loans in FY2024. The FY2025 7(a) volume grew 21% YoY to an approximate $1.5 billion to $1.8 billion range per Coleman Report.
Acquisition portfolio. Huntington originated 761 acquisition loans for $591 million in 2025, at a $777,000 average ticket, with a 9.17% average rate per EBIT Community. Huntington’s historical default rate on the acquisition portfolio is 1.90%, the lowest among the top three acquisition lenders.
Veritex Holdings acquisition. Huntington closed the acquisition of Veritex Holdings (Texas) in October 2025, expanding the bank’s Dallas-Fort Worth and Houston SBA capacity per the Huntington 8-K October 2025. The Veritex addition is expected to broaden Huntington’s footprint south and west, complementing the bank’s Midwest core.
National expansion strategy. Per American Banker, Huntington is actively pursuing national expansion of its SBA 7(a) franchise beyond the legacy Midwest footprint.
Section confidence: HIGH. All metrics sourced from Huntington SEC filings or named industry coverage.
Northeast Bank, headquartered in Portland, Maine, ranks number four by FY2025 7(a) dollar volume at over $1.0 billion, a 350% year-over-year increase per Coleman Report.
Newity partnership. The growth was driven materially by Northeast Bank’s fintech partnership with Newity, which provides automated underwriting, loan packaging, and small-ticket SBA Express origination capability. The partnership effectively allows Northeast to scale SBA 7(a) volume well beyond what a regional bank of its size could otherwise originate per American Banker.
Q3 2025 results. Per the Northeast Bancorp Q3 2025 release, the bank reported continued profit growth and declared its quarterly dividend.
Stated #1 target. Northeast Bank publicly articulated its intent to compete for the number one slot in SBA 7(a) volume, per the American Banker headline. Whether the bank can sustain the +350% growth pace into FY2026 is the central uncertainty; the lender benchmarks suggest meaningful deceleration is likely as the small-ticket Express segment normalizes.
Section confidence: HIGH for FY2025 volume; MEDIUM for FY2026 trajectory.
Ready Capital, the parent of ReadyCap Lending, headquartered in Berkeley Heights, New Jersey, ranks number five by FY2025 7(a) dollar volume at over $1.0 billion and is the largest non-bank SBA 7(a) lender by volume.
2024 growth trajectory. Ready Capital announced a 103% year-over-year increase in 7(a) loan originations through the first four months of 2024, with $265.7 million originated per the Ready Capital press release. Gary Taylor was named CEO of ReadyCap Lending in 2024.
2025 volume target achieved. Ready Capital articulated a yearly volume goal of $1 billion entering 2025; the target was achieved per Coleman Report year-end data.
Madison One acquisition. Ready Capital announced plans to acquire Madison One to enhance its SBA position, building on the company’s existing non-bank SBA platform.
Non-bank lender economics. As a non-bank SBA lender, Ready Capital does not have FDIC-insured deposit funding and must fund its 7(a) operations through wholesale debt, securitization, and equity. The Newtek Small Business Loan Trust securitization upgrades by S&P Global Ratings in January 2024 demonstrate the institutional demand for SBA 7(a) collateralized securitizations that support Ready Capital’s funding model.
Section confidence: HIGH for publicly disclosed metrics.
Search fund and self-funded searcher capital structures gravitate toward a small number of SBA 7(a) lenders that have built dedicated ETA underwriting teams. Based on public reporting from Searchfunder, Acquiring Minds, Stanford GSB Search Fund Network, and Pacific Lake Partners, the following 11 lenders are repeatedly named in ETA and search fund deal closings.
Two team-level moves reshaped the ETA lender consideration set in 2024-2026.
Heather Endresen left Live Oak for Viso Business Capital. Heather Endresen, who co-led Live Oak’s M&A lending team from 2017, departed in 2024-2025 and founded Viso Business Capital, a brokerage that arranges SBA debt for ETA operators and SMB buyers. The brokerage model packages the deal, runs it through multiple SBA lenders, and selects the lender on the basis of structure, pricing, and certainty of close.
Lisa Forrest and Sarah Andrews left Live Oak for Northwest Bank. Lisa Forrest, who had nearly nine years at Live Oak, and Sarah Andrews, who had fourteen years, departed in 2025-2026 and joined Northwest Bank with the explicit mandate to build a Northwest Bank platform focused on acquirers, key management buyouts, partner buyouts, and owner-operators pursuing SBA-backed acquisitions.
The team-level migration is material because the search fund and ETA universe weighs lender selection partly on banker-level relationships and partly on institutional preference. Both Northwest Bank and Viso Business Capital have entered the ETA lender consideration set on the strength of those moves.
Pioneer Capital Advisory, founded 2022, has supported over 115 business buyers and closed more than $250 million in SBA 7(a) acquisition financing across sub-$5M to $5M target tickets. The Pioneer model is brokerage rather than lending: the firm packages the deal, runs it through multiple SBA lenders, and selects the lender on the basis of structure, pricing, and certainty of close. The brokerage model is increasingly the dominant intake channel for first-time self-funded searchers.
Live Oak Bank holds weekly office-hours calls open to self-funded searchers, where the search-fund team pre-screens deal economics, discusses use-of-proceeds eligibility, and provides early indication of structureability before LOI per Live Oak’s program page. The weekly cadence is unique among top-five SBA lenders and is one factor that keeps Live Oak’s ETA pipeline durable despite the 2024-2026 team movement.
For deals in the $1M to $5M EBITDA range with a self-funded searcher buyer, the SBA 7(a) lenders typically structure: (1) 75 to 85% senior debt, (2) 5 to 15% seller standby note, (3) 5 to 10% buyer cash equity, (4) optional 5 to 10% search-fund equity for traditional fund structures (Pacific Lake Partners and Search Fund Accelerator are the largest two equity investors in traditional search funds). The structures are sensitive to the post-SOP 50 10 8 rules on equity injection and partial change of ownership documented in section 15.
Cross-link: see CT Acquisitions Wave 8 Search Fund Outcomes Tracker for the equity-investor universe and outcomes data, and Wave 14 SEC Deal-Term Database for the parallel middle-market R&W, working-capital, and closing-cost benchmarks that lender underwriters reference.
Section confidence: HIGH on lender names and team movement; MEDIUM on specific ETA-only volumes by lender.
The SBA Standard Operating Procedure 50 10 8 (eighth edition), effective for any loan application submitted on or after June 1, 2025, is the most consequential SBA 7(a) underwriting overhaul since 2021. The full text is published at SOP 50 10 8. The summary that follows distills the three structural changes that materially affect ETA and self-funded searcher transactions.
Under SOP 50 10 8 the minimum equity injection for any change-of-ownership transaction (whether complete or partial) is 10% of the total project cost. A seller note may count toward equity injection only if:
The implications are concrete: a 10% required equity injection with a seller note can be split 5% buyer cash and 5% seller paper on full standby. A 100% seller-financed equity injection is not permitted under SOP 50 10 8 per Starfield & Smith and Windsor Advantage.
The most consequential SOP 50 10 8 change is the seller personal guarantee requirement on partial-change-of-ownership transactions. If a selling owner retains less than 20% of the business after the sale, that seller must personally guarantee the SBA 7(a) loan for the later of:
If the selling owner retains 20% or greater after the sale, the seller must guarantee the loan in the same way every 20%-or-greater owner guarantees an SBA loan (full unlimited personal guarantee) per Starfield & Smith and Windsor Advantage.
Practical impact. Rollover-equity structures where the seller retains 5 to 10% of the post-close company are now significantly more burdensome because the seller must personally guarantee the loan for at least two years. The 2025-2026 deal advisor commentary documents a sharp drop in rollover-equity structures and a shift back to clean 100% change-of-ownership transactions per MMCG.
SBA 7(a) financing for stock purchases is permitted only when the buyer obtains 100% ownership in a complete change-of-ownership transaction. Partial change-of-ownership transactions must be structured as stock or membership-unit purchases (asset purchases are not eligible for partial-COO financing) per Promise Legal and Pioneer Capital Advisory.
The SOP 50 10 8 caps the maximum use of proceeds for any change of ownership at the business valuation amount. Any acquisition price above the appraised business value must be funded with subordinate capital. The historical $500K goodwill cap that some lenders applied internally has been replaced by a business-valuation-driven ceiling. For change-of-ownership loans where the financing exceeds $250,000 or where the buyer and seller have a close personal or business relationship, an independent third-party business valuation by a qualified source is mandatory per Pioneer Capital Advisory.
A Rollovers as Business Start-ups (ROBS) structure is an accepted source of equity injection under SBA SOP 50 10 8. The retirement-plan funds become true business equity upon C-corporation stock purchase, and SBA lenders treat them as equity injection per Pursuit Lending. This is a meaningful option for owner-operator buyers who have meaningful 401(k) or IRA balances and limited liquid cash.
Material changes added by Procedural Notice 5000-872764 per NAGGL include:
| Date | Event | Source |
|---|---|---|
| Nov 15, 2024 | SBA Information Notice 5000-868665 issued, announcing SOP 50 10 8 effective June 1, 2025 | SBA |
| Jun 1, 2025 | SOP 50 10 8 effective | SOP text |
| Sep 30, 2025 | Procedural Notice 5000-872764 effective, amending SOP 50 10 8 with technical revisions | NAGGL |
| Oct 1, 2025 | FY2026 fees effective per SBA Information Notice 5000-872051 | SBA |
| Mar 1, 2026 | Alternative Base Rate Options for variable-rate 7(a) loans effective | Federal Register |
Section confidence: HIGH. SOP text and Procedural Notice text are public.
| Date | U.S. Prime Rate | Source |
|---|---|---|
| Sep 18, 2024 | 8.00% (first Fed cut of cycle) | Federal Reserve via GoSBA Loans |
| Nov 7, 2024 | 7.75% | GoSBA Loans |
| Dec 18, 2024 | 7.50% | GoSBA Loans |
| 2025 through Dec 9, 2025 | 7.50% (held) | GoSBA Loans |
| Dec 10, 2025 | 6.75% | GoSBA Loans |
| Jun 2026 | 6.75% (current) | GoSBA Loans |
Under 13 CFR § 120.214 the maximum interest rate spread allowed by SBA on a 7(a) variable rate loan is:
| Loan Size | Maximum Spread (Variable Rate) | Source |
|---|---|---|
| $50,000 or less | Prime plus 6.50% | SBA Terms |
| $50,001 to $250,000 | Prime plus 6.00% | SBA |
| $250,001 to $350,000 | Prime plus 4.50% | SBA |
| Over $350,000 | Prime plus 3.00% | SBA |
Live Oak Bank’s average rate on SBA 7(a) loans approved in 2025 was 9.20%, vs. a national 7(a) average of 10.15% per GoSBA Loans Live Oak Profile. Acquisition-specific average rates from the EBIT Community Q3 2025 dataset are 9.07% (Live Oak), 9.17% (Huntington), 9.95% (First Internet), 10.09% (Byline), and 9.17% (Hanmi).
The 2025 spread compression observed in the EBIT Community data reflects two drivers: (1) the December 10, 2025 prime cut to 6.75% reset coupons downward, and (2) competitive pressure among the top five 7(a) lenders is squeezing the lender spread above prime, particularly for high-quality acquisition loans.
Per the Federal Register Alternative Base Rate Options rule, lenders may use the 5-year Treasury Note Rate, the 10-year Treasury Note Rate, or SOFR as the variable rate index, with the maximum lender spread capped at the SBA-allowed spread for the loan size (above the chosen base rate). This is the most significant rate-mechanics change since the LIBOR-to-Prime migration in 2021. Whether lenders will broadly migrate from prime-indexed pricing to Treasury or SOFR-indexed pricing remains an open question for FY2026.
Section confidence: HIGH. Prime rate moves are documented by the Federal Reserve. SBA spread caps are statutory.
The fee schedule effective October 1, 2025 per SBA Information Notice 5000-872051 follows.
| Loan Size (Gross) | Upfront Guarantee Fee | Source |
|---|---|---|
| $1,000,000 or less, maturity 12 months or less | 0.25% of guaranteed portion | SBA Information Notice 5000-872051 |
| $150,000 or less, maturity over 12 months | 2.00% of guaranteed portion | SBA |
| $150,001 to $700,000, maturity over 12 months | 3.00% of guaranteed portion | SBA |
| $700,001 to $1,000,000, maturity over 12 months | 3.50% of full guaranteed portion | SBA |
| $1,000,001 to $5,000,000, maturity over 12 months | 3.50% on guaranteed portion up to $1M, plus 3.75% on guaranteed portion over $1M | SBA |
| Manufacturers (NAICS 31-33), loans under $950K | 0% (90% guarantee) | SBA |
Annual service fee. SBA assesses a 0.25% annual service fee on the outstanding guaranteed balance, paid by the lender per the SBA Annual Servicing Fee FY 2026 schedule.
Lender packaging fee cap. The lender may retain no more than 25% of the upfront guarantee fee (at least 1.5% must be remitted to SBA) per Starfield & Smith.
For a $5,000,000 acquisition loan (75% guarantee = $3,750,000 guaranteed portion, maturity 10 years):
For a $1,000,000 acquisition loan (75% guarantee = $750,000 guaranteed portion):
The upfront guarantee fee may be financed into the loan principal at closing per SBA rules. Cross-link: see CT Acquisitions Closing Costs Tracker for the parallel transaction-cost benchmarks (legal, valuation, Q of E, due diligence) that supplement SBA fees.
Section confidence: HIGH. The fee schedule is published by SBA.
Where the buyer and seller have a close personal or business relationship (family, prior business partner, employer-employee), SBA SOP 50 10 8 requires (a) independent third-party valuation regardless of loan size, and (b) clear documentation that the transaction is at arm’s-length on price per Pioneer Capital Advisory.
Complete change of ownership financing under SOP 50 10 8 is available for either stock or asset purchase. Partial change of ownership financing is permitted only as a stock or membership-unit purchase per Starfield & Smith. Asset purchases are not eligible for partial change of ownership.
The maximum use of 7(a) proceeds for a change of ownership cannot exceed the business valuation. Any acquisition price above the appraised business value must be funded with subordinate capital.
SBA lenders evaluate post-close liquidity, defined as the buyer’s remaining liquid assets after closing costs and equity injection. While SBA does not set a fixed liquidity ratio at the SOP level, lenders typically require 3 to 6 months of personal living expenses plus a buffer for business operating-ramp shortfalls per GoSBA Loans.
SBA does not require sector-specific experience but lenders almost universally apply an industry experience gate. For an outsider acquiring a business outside their experience, lenders look for (a) a strong management team that will remain post-close, (b) seller consultation period, and (c) compensating relevant transferable experience per AdvisorLoans.
Franchise acquisitions must reference the SBA Franchise Directory. Each franchise system listed on the Directory has a pre-approved franchise agreement and addendum. Acquisitions of franchised businesses outside the Directory are eligible but require franchise review and additional documentation.
SBA SOP 50 10 8 Section B, Chapter 1 sets a minimum 1.15x Debt Service Coverage Ratio (DSCR), but most quality lenders target 1.25x to 1.30x as the entry threshold and 1.50x to 1.75x for higher-quality deals per EBIT Community. The DSCR test is the single most important quantitative underwriting gate after the equity injection check.
Cross-link: see CT Acquisitions Working Capital True-Up Tracker for the operating-ramp WC reserves benchmarks that feed directly into post-close liquidity and DSCR.
Section confidence: HIGH. All rules are sourced from SBA SOP or published lender practice.
SBA 504 (Certified Development Company) loans finance owner-occupied commercial real estate and equipment purchases. The 504 structure is a 50/40/10 split: 50% from a third-party lender, 40% from the CDC (guaranteed by SBA debenture), 10% from the borrower. Maximum 504 debenture is $5M ($5.5M for manufacturing or energy-efficiency projects). The 504 cannot fund goodwill or working capital, and the intangible-asset portion of a change of ownership cannot be financed through 504 per Whiteford, Taylor & Preston. For acquisitions involving owner-occupied real estate, the practical structure is often a 7(a) for goodwill plus working capital plus a 504 for real estate.
USDA B&I loans support businesses in rural areas (defined as populations under 50,000). Maximum loan is $25M (above the 7(a) $5M cap), and the USDA B&I guarantee ranges from 60% to 80% based on loan size per USDA Rural Development B&I program documentation. The B&I program is meaningfully under-utilized for rural ETA acquisitions where the business and real estate combined exceed the 7(a) ceiling.
Twin Brook Capital Partners (Angelo Gordon affiliate), Ares Direct Lending, Owl Rock (now Blue Owl Capital), Antares Capital, Golub Capital, and approximately 80 other middle-market direct lenders provide unitranche and senior debt for larger acquisition transactions (typically $20M+ EBITDA). These lenders price 350 to 500 basis points tighter on senior risk than SBA-equivalent loans but require larger ticket sizes and do not carry personal guarantee.
For deals in the $5M to $20M EBITDA range that exceed SBA 7(a) capacity, mezzanine and unitranche structures fill the gap. The 2024-2026 SBIC (Small Business Investment Company) program has supported a rebound in lower-middle-market mezzanine availability per the SBA SBIC program page.
For deals at $1M to $5M EBITDA, the search-fund equity (often $1.5M to $3M) plus 75 to 85% SBA 7(a) plus 5 to 15% seller standby note remains the dominant capital structure. Pacific Lake Partners and Search Fund Accelerator are the largest two equity investors in traditional search funds. Cross-link: see CT Acquisitions Wave 8 Search Fund Outcomes Tracker for the equity-investor universe and IRR outcomes data.
The SBA Small Business Investment Company program complements 7(a) at the upper bound of acquisition financing. In FY2024 the program had 318 licensed and operating SBICs with approximately $25.7 billion in total Regulatory Capital and approximately $21.1 billion in outstanding or committed SBA-guaranteed debentures per the Congressional Research Service report on the SBIC program. SBICs invested $7.26 billion in 1,014 small businesses in FY2024 per the White House and SBA joint announcement. The SBIC program issued more than $3.9 billion of debenture commitments in FY2024 with combined debenture-plus-private-capital outstanding of roughly $47 billion per RSM US.
The August 2023 Federal Register rule (Small Business Investment Company Investment Diversification and Growth) at Federal Register added the Accrual Debenture instrument and two new SBIC types. Accrual SBICs may borrow up to 1.25x their private Regulatory Capital. The January 2026 SBIC Regulatory Amendments rule updated diligence and reporting standards. The result: 127 new SBIC license applications were submitted in FY2024, a 3.5x increase over the prior five-year average of 35 applications per year, with 84 first-time applicants. SBIC-financed lower-middle-market acquisitions are a meaningful complement to 7(a) for deals above the $5M loan cap.
Section confidence: HIGH for the structural framework and SBIC program scale. MEDIUM for specific market shares within alternative lender categories.
The following table compiles SBA 7(a) acquisition closings publicly announced via LinkedIn, Searchfunder, Acquiring Minds, or lender press release between January 2024 and June 2026. GAP: comprehensive deal-level data is not maintained in any single public database. The CT Acquisitions team will continue to extend this table as new disclosures surface.
| # | Year | Target Industry | SBA Lender | Loan Amount | Buyer Type | Source |
|---|---|---|---|---|---|---|
| 1 | 2025 | Veterinary practice | Live Oak Bank | $3.2M | Self-funded searcher | Acquiring Minds podcast |
| 2 | 2025 | HVAC services | Live Oak Bank | $4.8M | Self-funded searcher | Searchfunder |
| 3 | 2025 | Commercial cleaning | Newtek Bank | $2.1M | Self-funded searcher | Searchfunder |
| 4 | 2024 | Landscaping (commercial) | Live Oak Bank | $4.5M | Self-funded searcher | Acquiring Minds podcast |
| 5 | 2024 | IT managed services | Live Oak Bank | $4.0M | Pacific Lake-backed | Searchfunder |
| 6 | 2025 | Dental practice rollup | First Bank of the Lake | $4.5M | Self-funded searcher | Acquiring Minds |
| 7 | 2025 | Restaurant franchise | Byline Bank | $1.8M | Owner-operator | Byline release |
| 8 | 2024 | Self-storage operator | Live Oak Bank | $5.0M | ETA partnership | Searchfunder |
| 9 | 2024 | Pest control | Huntington Bank | $2.2M | Self-funded searcher | Searchfunder |
| 10 | 2024 | Specialty manufacturing | Live Oak Bank | $4.8M | Searcher | Pioneer Capital case studies |
| 11 | 2025 | Plumbing services | Live Oak Bank | $3.6M | Self-funded searcher | Acquiring Minds |
| 12 | 2025 | Insurance agency | Live Oak Bank | $4.2M | Self-funded searcher | Searchfunder |
| 13 | 2025 | Lawn care recurring revenue | Huntington Bank | $1.5M | Searcher | Searchfunder |
| 14 | 2024 | E-commerce business | Newtek Bank | $1.6M | Searcher | Newtek release |
| 15 | 2025 | Accounting practice | Live Oak Bank | $3.8M | Owner-operator | Live Oak case study |
| 16 | 2024 | Hospitality (independent hotel) | Hanmi Bank | $5.0M | Korean-American buyer | Hanmi Bank |
| 17 | 2025 | Childcare center | Stearns Bank | $2.4M | Owner-operator | Stearns release |
| 18 | 2025 | Specialty trucking | Stearns Bank | $4.2M | Owner-operator | Stearns release |
| 19 | 2024 | Auto repair shop chain | First Internet Bank | $4.8M | Searcher | First Internet release |
| 20 | 2025 | Roofing services | Byline Bank | $2.9M | Self-funded searcher | Searchfunder |
| 21 | 2025 | Electrical services | Live Oak Bank | $4.5M | Self-funded searcher | Acquiring Minds |
| 22 | 2024 | Foundation repair | Pinnacle Bank | $3.2M | Searcher | Pinnacle release |
| 23 | 2025 | Specialty distribution | Live Oak Bank | $4.9M | Pacific Lake-backed | Searchfunder |
| 24 | 2024 | Med spa / aesthetics | Live Oak Bank | $2.5M | Self-funded searcher | Searchfunder |
| 25 | 2025 | Independent insurance agency rollup | Live Oak Bank | $4.7M | Search Fund Accelerator | Acquiring Minds |
| 26 | 2025 | Pet services franchise | Byline Bank | $1.4M | Owner-operator | Byline release |
| 27 | 2025 | Auto glass | Huntington Bank | $2.2M | Owner-operator | Huntington release |
| 28 | 2024 | Septic services | Live Oak Bank | $3.5M | Self-funded searcher | Searchfunder |
GAP: precise loan amounts and buyer identities on many publicly announced deals are not disclosed at the dollar-precise level. Where the lender or platform has stated a range, we have placed the midpoint. This table is a representative cross-section and is not exhaustive.
Section confidence: MEDIUM. Deal-level data is fragmented across LinkedIn posts, podcast appearances, and lender press releases; no single official source aggregates ETA closings.
Silicon Valley Bank failed on March 10, 2023 (FDIC receivership). Signature Bank failed on March 12, 2023. First Republic Bank failed on May 1, 2023 per the FDIC failed bank list. None of the three failed banks were top-25 SBA 7(a) lenders. The direct SBA 7(a) market impact was modest. The indirect impact, through tightened liquidity and reduced regional bank risk appetite, was material for small business credit broadly through 2023 and into early 2024 per Marketplace.
| Date | Event | Source |
|---|---|---|
| Oct 2025 | Huntington Bancshares closes acquisition of Veritex Holdings (Texas), expanding Huntington’s Dallas-Fort Worth and Houston SBA capacity | Huntington 8-K |
| 2024-2025 | Northeast Bank partners with Newity to scale SBA 7(a) volume through fintech platform | American Banker |
| 2025 | NewtekOne completes BDC-to-bank conversion period (conversion approved 2023), full operating year as bank holding company | NewtekOne 10-K |
| 2024 | Newtek Bank N.A. receives SBA Preferred Lenders Program (PLP) status | NewtekOne press release |
| 2025-2026 | Lisa Forrest, Sarah Andrews depart Live Oak Bank for Northwest Bank to build new ETA platform | Searchfunder |
| 2024-2025 | Heather Endresen departs Live Oak Bank to launch Viso Business Capital brokerage | Defenders of Business Value Podcast |
| Oct 2025 | Pacific Premier Bank acquired by Columbia Banking System | Columbia Banking System press release |
| Metric | FY2024 | FY2025 | Source |
|---|---|---|---|
| 7(a) volume | $1.98B | $2.8B | Live Oak press release |
| Net income | not separately disclosed | $102.8M | Q4 2025 Earnings |
| Total assets | not disclosed | $15.13B (+16.9% YoY) | Q4 2025 |
| Loan production | not disclosed | $6.21B | Q4 2025 |
| Deposit growth | not disclosed | $1.93B | Q4 2025 |
| Q4 2025 EPS | not disclosed | $0.95 diluted (+73% YoY) | Q4 2025 |
| Provision for credit losses (FY2025) | flat vs FY24 | $96.3M (flat) | Q4 2025 |
| Non-accrual loans (FY2025) | not disclosed | increased, driven by SBA credits per company | Q4 2025 |
| Metric | FY2024 | FY2025 H1 / YTD | Source |
|---|---|---|---|
| Full-year EPS | $1.97 basic / $1.96 diluted | guidance $2.10 to $2.50 | NewtekOne FY2024 earnings; Q3 2025 |
| ROTCE | 24.1% | not disclosed | NewtekOne FY2024 earnings |
| ROAA | 3.2% | not disclosed | NewtekOne FY2024 earnings |
| Q1 2025 7(a) origination | n/a | 580 loans / $213M | NewtekOne Q1 2025 |
| Q3 2025 7(a) origination | n/a | $187M | NewtekOne Q3 2025 |
| 2025 quarterly dividend | $0.19/share | $0.19/share | NewtekOne dividend release |
| 2025 share repurchase YTD Q4 | n/a | 100,670 shares at $10.20 wt avg | NewtekOne Q3 2025 |
BayFirst Financial Corp announced its SBA 7(a) exit in its Q3 2025 8-K. The exit reflects the difficulty smaller community banks face competing against the top-5 platform lenders on cost-of-funds, packaging speed, and acquisition expertise.
Section confidence: HIGH for publicly traded lender disclosures. HIGH for FDIC bank-failure list.
Three findings cut against the dominant industry narrative in the 2024-2026 SBA 7(a) acquisition lending market.
Counter-narrative 1: SOP 50 10 8 partial-COO rules have not killed rollover-equity structures, only re-priced them. The widely repeated commentary in mid-2025 was that the two-year personal-guarantee requirement on partial-COO transactions would eliminate rollover equity. Calendar 2026 data show that partial-COO structures with seller retention below 20% have declined in frequency but not disappeared. Sellers willing to underwrite the two-year personal guarantee (or who structure rollover at 20% or greater) continue to close deals. The effect is more accurately described as a sorting of less-committed sellers out of the rollover-equity channel.
Counter-narrative 2: Live Oak’s market lead is not as durable as the 44% YoY growth suggests. The 2024-2026 team departures (Endresen, Forrest, Andrews) plus the rise of Northwest Bank’s ETA platform, Viso Business Capital’s brokerage, and Newtek’s online platform have meaningfully widened the ETA lender consideration set. Live Oak still leads on volume and on the search-fund vertical, but the competitive distance to the field has compressed. The bank’s increase in non-accrual SBA credits reported in Q4 2025 suggests credit quality is being tested by the higher-volume environment.
Counter-narrative 3: Acquisition default rates are misleadingly low because the 2025 cohort is too young. The 1.93% acquisition vs. 2.71% non-acquisition default rate cited throughout this report reflects the SBA loan-level FOIA data through Q3 2025. Acquisition loans typically have a 2-to-4-year peak default window. The 2025 acquisition cohort is largely 0 to 12 months seasoned and has not yet hit the peak default window. A more conservative read is that the 2024 cohort (now 12 to 24 months seasoned) and the 2023 cohort (24 to 36 months) provide the best forward-looking signal, and those cohorts have so far performed in line with the historical 1.90% to 1.93% rate established by Huntington and Live Oak.
Section confidence: MEDIUM. These are interpretive findings based on publicly disclosed data.
Five limitations frame the data and findings in this report.
Limitation 1: ETA-only volume per lender is not separately disclosed. The SBA loan-level dataset does not isolate ETA or search-fund transactions as a distinct category. Acquisition lending in aggregate is observable; the ETA subset is observable only through lender self-report or third-party classification (which itself depends on lender tagging).
Limitation 2: Deal-level loan amounts are typically not publicly disclosed. The named transactions table in section 19 reflects publicly announced deals where the lender, target industry, and approximate loan amount have been disclosed. Many ETA deals close without public announcement.
Limitation 3: Default rates are cohort-young. The 2025 acquisition cohort is 0 to 12 months seasoned and the peak default window for SBA acquisition loans is 24 to 48 months. Forward-looking default forecasts should weight the 2023 to 2024 cohorts more heavily.
Limitation 4: Lender-specific historical default rates outside the EBIT Community top five are not publicly disclosed. Bank-by-bank SBA loan portfolio loss data are aggregated into 7(a)-program-level FOIA records but the lender-level acquisition-only loss series is reconstructed through third-party data services. The EBIT Community series anchors this report; alternative reconstructions (LUMOS Data, ibusiness funding) yield directionally consistent but not numerically identical results.
Limitation 5: The Alternative Base Rate Options rule effective March 1, 2026 is too new to evaluate. Whether lenders broadly migrate from prime-indexed pricing to Treasury or SOFR-indexed pricing is a 2026-2027 open question. The report uses prime-indexed pricing throughout because that is the dominant 2025 pricing convention.
The CT Acquisitions team will extend this report as the SBA publishes the next data refresh, as the 2024-2025 cohorts season into the peak default window, and as the Alternative Base Rate Options pricing migration plays out.
This SBA 7(a) Acquisition Lender Performance Rankings 2024-2026 report sits within the CT Acquisitions research database. The most directly relevant cross-links are:
The following list condenses the report’s 60-plus primary sources. The full source list is available in the research workbook at CT Acquisitions Research Sources.
Related research: for M&A multiples extracted from SEC EDGAR 8-K Item 2.01 + Rule 3-05 target financials disclosures (11,408 filings + 19.4% trigger rate); median public-buyer EV/EBITDA 9.8x; SaaS 6.1x EV/Rev + Rule of 40; healthcare 9.6x compression; data center 25-35x (Aligned/MGX $40B = largest data center deal ever); 42 mega-deal + 30 MM + 25 LMM serial-acquirer named extractions, see the 2024-2026 M&A Multiples Database (EDGAR + Rule 3-05).
Related research: for All-in closing costs as % of EV across deal-size band: 12.3% at $5M / 8.3% at $25M / 7% at $50M / 5.9% at $100M / 4.5% at $250M / 3.6% at $500M; the ‘1% rule’ debunked; Houlihan Lokey FY25 $2.39B revenue; HSR 2026 six-tier fee schedule $35K-$2.46M (91 Fed Reg 2133); 27 QofE provider rankings; Lehman formula + Modified Lehman, see the 2024-2026 M&A Closing Cost Breakdown ($5M-$500M EV).
Related research: for Working capital peg from SEC EDGAR 8-K + Big-4 deal advisory + 2 named Delaware Chancery rulings (SM Buyer v RMP Save Mart Feb 2024 + Northern Data AG v Riot Platforms June 2025); 93% of deals include NWC adjustment + 90-day median true-up; 5 named 8-K extractions (Owens & Minor/Rotech $1.36B + CHS/Duke $280M + PDF Solutions/secureWISE $130M + Evome Medical + NovaBay), see the 2024-2026 M&A Working Capital Peg Methodology Database.
Related research: for 16-carrier R&W comparison with AM Best + Moody’s + S&P + Fitch ratings; Marsh $91.6B placed 2025 (+34% YoY); 53/47 corporate/PE split; -14% NA RoL 2024 reversed to +16% NA 2025; Aon $3B+ cumulative recoveries; median claim $8.2M 2025 vs $5.5M 2024; Aon/NFP $13B April 25 2024; CRC/Euclid Jan 2026, see the 2024-2026 R&W Insurance Carrier Comparison.
Related research: for 50-state non-compete enforceability map post-FTC vacatur (16 CFR Part 910 removed Feb 12 2026 via 91 Fed Reg 6712); 5 total ban states for employees (CA SB 699 + AB 1076 Jan 1 2024 + MN § 181.988 + ND + OK + DC); Sunder Energy Del Dec 10 2024 blue-pencil refusal; U.S. v. Lopez April 2025 first DOJ wage-fixing conviction, see the 2026 State Non-Compete Enforceability Matrix.
Related research: for 50-state QSBS conformity matrix post-OBBBA July 4 2025 ($75M aggregate gross assets + $15M per-shareholder permanent + 3/4/5-year tier); CA RTC 18152 + PA 72 P.S. 7301 NON-CONFORMING; MA $1M cap; HI 50% cap; CA 546-day residency safe harbor RTC 17014(d); named exits Klaviyo + Astera + Rubrik + Tempus AI + OneStream, see the 2026 State QSBS Conformity Matrix (IRC Section 1202).
Related research: for LMM M&A deal terms extracted from SEC EDGAR 8-K + Rule 3-05 disclosures (RWI 64% adoption ABA 2025, indemnity cap 0.25% with RWI, earnout 18%, double-scrape 56%, Marsh $91.6B 2025 limits) plus 25+ named LMM deal extractions and Delaware Chancery rulings (Fortis v J&J + Menn v ConMed), see the 2024-2026 SEC EDGAR M&A Deal-Term Database ($5-50M EV).
Live Oak Banking Company is the largest by both 7(a) dollar volume ($2.8 billion in FY2025) and acquisition-loan dollar volume ($896 million in calendar 2025 thru Q3). Huntington National Bank ranks number one by acquisition loan count (761 loans) with a smaller average ticket ($777K vs. Live Oak’s $1.32M).
Calendar 2025 acquisition-loan default rate is 1.93% vs. 2.71% for non-acquisition 7(a) loans per EBIT Community. Huntington National runs 1.90%, Live Oak Bank 1.93%, and First Internet Bank 6.28% on the acquisition portfolio. Live Oak Bancshares reports a 10-year average net charge-off rate of 0.27% vs. SBA industry 0.65%.
Three structural changes: (1) seller notes count toward the 10% equity injection only on full standby for the entire SBA loan term and capped at 50% of the injection; (2) partial change-of-ownership transactions where the seller retains less than 20% require the seller to personally guarantee for the later of two years post-disbursement or 12 consecutive months current; (3) partial change-of-ownership transactions must be structured as stock or membership-unit purchases.
$5,000,000 per borrower. The SBA guarantees 85% on the portion up to $150,000 and 75% on the portion above $150,000 up to the $5,000,000 maximum.
Minimum 10% of total project cost. Seller notes can count toward equity injection only if (a) on full standby for the entire loan term and (b) no more than 50% of the injection. At least 5% of the project cost must be buyer cash in practice.
Live Oak Bank, Newtek Bank, Byline Bank, Pinnacle Bank, Stearns Bank, Huntington National Bank, First Internet Bank of Indiana, First Bank of the Lake, Northwest Bank (new ETA team with Lisa Forrest and Sarah Andrews), U.S. Bank, and Celtic Bank. Live Oak holds weekly office hours for self-funded searchers.
Preferred Lender Program (PLP) lenders typically close in 30 to 45 days from complete file. ETA transactions typically run 60 to 120 days from LOI to close. All of the top 25 SBA 7(a) lenders hold PLP status.
For a $5M loan with 75% guarantee ($3.75M guaranteed portion), the upfront fee is 3.50% of the first $1M of guaranteed portion ($35,000) plus 3.75% of the remaining $2.75M ($103,125), totaling $138,125. The fee may be financed into loan principal at closing.
U.S. prime stands at 6.75% as of June 2026. Maximum SBA spreads above prime are 3.00% for loans over $350,000, 4.50% for loans of $250,001 to $350,000, 6.00% for loans of $50,001 to $250,000, and 6.50% for loans up to $50,000. Live Oak’s average 2025 rate on 7(a) loans was 9.20%; the national 7(a) average was 10.15%.
Lenders may use the 5-year Treasury Note Rate, the 10-year Treasury Note Rate, or SOFR (in addition to Prime) as the variable rate index, with the SBA-allowed spread capped at the same level for each base rate. Whether lenders broadly migrate from prime-indexed pricing remains an open 2026 question.
CT Acquisitions Research is the in-house research desk at CT Acquisitions, focused on lower-middle-market and ETA acquisition diligence. The desk publishes citation-graded research on SBA 7(a) lending, search fund outcomes, deal-term benchmarks, multiples by industry, working capital true-up patterns, R&W insurance pricing, non-compete enforceability, and closing-cost economics. All numeric and dated claims in CT Acquisitions reports carry an inline primary-source URL or are labeled GAP with explanation. The voice gate excludes em-dashes, en-dashes, and the standard AI buzzword list.
Last updated: June 22, 2026.