Small Business Lending: Live Oak Bank Takes the Lead for the Second Time

In the last year, Live Oak Bank has been named the most active lender of SBA 7(a) loans for the sixth consecutive time by the U.S. Small Business Administration. This means that Live Oak has lent more money to small businesses than any other bank through this program, with a total of $1.8 billion in loans during the SBA’s fiscal year that ended on September 30.

This is particularly noteworthy because a 7(a) loan is the SBA’s primary business loan program, which can be used for a variety of purposes such as refinancing, acquiring or improving real estate buildings, or short- or long-term working capital. Despite being the top lender in terms of dollar amount and having an average loan size that is larger than others in the group, Live Oak did not have the most loans or the largest average loan size overall.

It’s worth noting that standard 7(a) loans typically come with long repayment periods and low interest rates, making them highly attractive to small business owners who are seeking funding for their ventures. This is because the SBA reimburses lenders for a portion of these loans if borrowers default or cannot repay them outright, which reduces risk for banks and makes these loans less expensive for borrowers. The cost of this guarantee is passed on to borrowers in the form of a guarantee fee, which is based on the size of the loan and varies from bank to bank.