Analysis of 357,866 SBA 7(a) loans from 2020-2025 using official FOIA data
Where you operate your business matters — not just for your customers, but for your SBA loan risk. We analyzed every SBA 7(a) loan issued from 2020 to 2025 and found that default rates vary by more than 12x depending on the state.
States with the Highest SBA Default Rates
Highest risk: Hawaii (2.4%), New York (2.4%), and Nevada (2.0%) lead the nation in SBA loan chargeoffs. High costs of living, competitive markets, and tourism volatility contribute to these numbers.
States with the Lowest SBA Default Rates
Lowest risk: Alaska (0.2%), Puerto Rico (0.3%), and Maine (0.4%) have the best repayment records. Lower competition and cost of living play a role.
Full SBA Default Rate Rankings by State
| # | State | Default Rate | Total Loans | Defaults | Total Volume |
|---|---|---|---|---|---|
| 1 | Hawaii | 2.4% | 905 | 22 | $221.8M |
| 2 | New York | 2.4% | 22,220 | 529 | $8.2B |
| 3 | Nevada | 2.0% | 3,599 | 73 | $1.9B |
| 4 | Florida | 2.0% | 26,502 | 521 | $14.8B |
| 5 | New Jersey | 1.9% | 12,188 | 226 | $5.7B |
| 6 | Delaware | 1.8% | 1,166 | 21 | $443.2M |
| 7 | Washington DC | 1.8% | 738 | 13 | $328.2M |
| 8 | Louisiana | 1.7% | 2,686 | 47 | $1.7B |
| 9 | Wyoming | 1.7% | 603 | 10 | $337.4M |
| 10 | Maryland | 1.6% | 5,991 | 97 | $2.4B |
| 11 | California | 1.5% | 41,489 | 639 | $26.2B |
| 12 | South Dakota | 1.5% | 923 | 14 | $375.0M |
| 13 | Arizona | 1.5% | 7,054 | 105 | $4.4B |
| 14 | Mississippi | 1.5% | 2,026 | 30 | $1.1B |
| 15 | Illinois | 1.5% | 12,446 | 184 | $6.5B |
| 16 | Texas | 1.5% | 27,126 | 399 | $19.8B |
| 17 | Virginia | 1.3% | 6,080 | 80 | $3.3B |
| 18 | Colorado | 1.3% | 9,453 | 123 | $5.8B |
| 19 | Connecticut | 1.3% | 4,503 | 57 | $1.7B |
| 20 | Missouri | 1.2% | 6,064 | 74 | $3.2B |
| 21 | Iowa | 1.2% | 2,278 | 27 | $964.5M |
| 22 | Alabama | 1.2% | 2,539 | 30 | $1.6B |
| 23 | Wisconsin | 1.2% | 6,597 | 76 | $3.4B |
| 24 | Oregon | 1.1% | 5,571 | 64 | $2.7B |
| 25 | Ohio | 1.1% | 20,593 | 232 | $6.5B |
| 26 | Minnesota | 1.1% | 9,951 | 112 | $4.3B |
| 27 | Pennsylvania | 1.1% | 12,190 | 134 | $5.4B |
| 28 | Georgia | 1.1% | 10,760 | 118 | $8.3B |
| 29 | Tennessee | 1.1% | 4,202 | 45 | $2.6B |
| 30 | Rhode Island | 1.1% | 1,310 | 14 | $472.7M |
| 31 | South Carolina | 1.1% | 4,056 | 43 | $2.5B |
| 32 | Indiana | 1.0% | 7,144 | 72 | $3.3B |
| 33 | Massachusetts | 1.0% | 9,015 | 87 | $2.7B |
| 34 | Washington | 0.9% | 9,777 | 92 | $5.8B |
| 35 | Utah | 0.9% | 6,036 | 56 | $3.1B |
| 36 | Michigan | 0.9% | 13,955 | 129 | $5.3B |
| 37 | New Mexico | 0.9% | 1,532 | 14 | $931.5M |
| 38 | Kansas | 0.9% | 2,712 | 24 | $1.4B |
| 39 | West Virginia | 0.9% | 1,131 | 10 | $413.5M |
| 40 | Oklahoma | 0.9% | 3,168 | 28 | $1.8B |
| 41 | Kentucky | 0.8% | 2,850 | 24 | $1.3B |
| 42 | Arkansas | 0.8% | 1,914 | 16 | $1.1B |
| 43 | Montana | 0.8% | 1,286 | 10 | $647.1M |
| 44 | North Carolina | 0.8% | 8,132 | 62 | $5.7B |
| 45 | Vermont | 0.7% | 999 | 7 | $246.4M |
| 46 | Nebraska | 0.6% | 1,953 | 12 | $879.1M |
| 47 | New Hampshire | 0.6% | 2,836 | 17 | $802.2M |
| 48 | Idaho | 0.5% | 3,246 | 17 | $1.4B |
| 49 | North Dakota | 0.5% | 781 | 4 | $350.9M |
| 50 | Maine | 0.4% | 1,900 | 8 | $485.6M |
| 51 | Puerto Rico | 0.3% | 2,926 | 10 | $516.6M |
| 52 | Alaska | 0.2% | 636 | 1 | $441.8M |
What Drives State-Level Differences?
- Cost of living — High-cost states (NY, HI, NV) put more pressure on business margins
- Industry mix — States heavy in hospitality and retail see more defaults
- Economic volatility — Tourism-dependent states were hit harder by post-COVID uncertainty
- Competition density — More businesses per capita = harder to survive
- Lender behavior — Some states have more aggressive lenders approving marginal deals
Getting an SBA Loan in a High-Risk State?
The right lender makes all the difference. GoSBA matches you with lenders who know your local market — completely free.
Data source: U.S. Small Business Administration FOIA 7(a) loan data, FY2020–FY2025.
