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2022 SBA Loan Trends

In these uncertain times, looking toward the future can seem like even more of a guessing game than usual. Here are our predictions for SBA loan trends for 2022.

Markets the world over are still recovering from the coronavirus pandemic, and yet prices have begun to rise. Confidence in the American economy remains at an all-time low.

In these uncertain times, looking toward the future can seem like even more of a guessing game than usual. When will the Federal Reserve (and resultingly, banks) raise interest rates? With the number of people working from home or leaving the workplace altogether, can we expect an increase in SBA loan applications?  

Here are our predictions for SBA loan trends for 2022.

The Economic Situation

Voices all over America are calling for a raise in general interest rates to counter the effects of inflation. So why hasn’t the Federal Reserve acted? When examining the inflation rate or any economic figure it’s important to keep in mind that they are usually based on year-over-year change. Because business numbers last year took such a blow, it’s reasonable to expect inflation to seem a lot larger in their wake.

It’s also worth noting that in the last 12 months wage increases have not kept up with inflation. Inflation will in nullify any wage increases by the end of 2021 and possibly wage increases throughout 2022.

In the interest of the jobs recovery, the Fed is holding back on raising interest rates. Though unemployment claims are now around pre-pandemic levels, labor participation is stagnating. The labor participation rate is currently 61.6%, one of its lowest rates since the 1970s.

One major reason appears to be the cost of childcare. Families with children are electing to stay home rather than work a job, as the cost of childcare, gas, insurance payments, and other associated costs often add up to more than one parent’s monthly salary. Effectively, the parent is, as one Redditor wrote, “paying to go to work.”

If increased inflation is not a bubble and we continue to see prices rise, parents may feel even more pressure to stay home. This may increase competition for jobs that allow workers to remain home, flipping the current situation and favoring employers in the hiring market.

Still, investors are predicting interest rates will rise by as much as 0.75 percentage points by September 2022.

Supply Chain Bottleneck Inflates Construction Prices

Relative to other industries, demand for lumber and construction barely slowed down during the pandemic. Now that the economic recovery is fully underway and demand has increased further, the lack of truck drivers, petrochemical plants, and mills has created a supply chain bottleneck. This has created higher construction labor costs and sharply increased lumber and plywood prices. Naturally, these bottlenecks are also a significant factor in the current inflation rate increase.

Correspondingly, SBA loan recipients are reporting consistent overspending between 10 to 30% in construction costs.

Because it can take more than two years to build new mills, and because the stigma against blue-collar jobs is slowing mill employment and operations, we can expect these increased construction costs to remain over the course of 2022 and perhaps 2023.

This cost increase should be factored into any SBA loan application moving forward.

Interest Rates

All our predictions were made using public SBA data sets and historical precedent.

Lowest and Highest

Warehouse-, storage unit-, and other non-residential building-based businesses took the win for lowest interest rates at an average of 4.83%. Given the huge amount of growth occurring in those industries, it’s reasonable to expect those interest rates to remain low.

The highest interest rate went to Electronic Shopping and Mail-Order Houses at 6.36%. With few exceptions, this has been consistent for the past five years, though the industry has grown considerably over the course of 2020 and 2021 with the popularity of dropshipping. We expect the growth in this industry to level off in 2022. 

Recent Changes

Between 2020 and 2021 interest rates dropped roughly 0.96%. One notable exception are trucking industries of all types, which dropped only 0.54%. This puts trucking above the current average of 5.51%. However, with increased shipping demand due to increased consumer demand overall, we may see interest rates in this industry continue to trend high. Whether these factors are enough to cool down the industry is yet to be seen.

2022 Predictions

By comparing the Federal Fund Effective Rate to the average SBA loan interest rates for past five years, it’s clear that banks are more responsive to decreases in interest rate than increases. If the Fed increases interest rates 0.75 percentage points as predicted by investors, then based on past behavior, we can expect average SBA loan interest rate to rise by just over 0.5 percentage points by the end of 2022.

This puts our predicted average SBA interest rate at 6.06% by the end of 2022.

Loan Amounts

All our predictions were made using public SBA data sets and historical precedent.

Lowest and Highest

The lowest average loan amount was in the logging industry, with an average of around $220K. Startlingly, this is slightly less than the industry logged (wink) in 2017, at $227K. This does not appear to be associated with the current lumber shortage.

The highest loan amount, predictably, goes to traveler accommodations. Purchasing a hotel or motel is expensive. In 2021, the average loan amount was $2.3 million USD.


Though the interest rate rose and fell between 2017 and 2021, loan amounts have consistently increased since 2017. On average loan amounts have increased 72.6% compared to 2017.

While it’s tempting to blame inflation (9.9% during this time), it accounted for less than half the difference between 2017 and 2020 across all industries, with the effect most exaggerated in industries unrelated to property construction.

As a result, we can’t point to increased construction costs, either.

The most dramatic increases (between 2019 and 2020, 19.6%; and between 2020 and 2021, 31.3%) have a simpler explanation. As lenders became overwhelmed by PPP loans, causing a backlog in usual SBA application processing times, banks began prioritizing loans they’re able to make the most money on. After all, it takes the same amount of time to process a loan application for $200K as it does a loan for $2 million.

As a result, even the SBA is open about the fact that loans issued for less than $350K have decreased by over 45% in the past five years. As banks continue recouping losses they experienced during the pandemic, we expect this trend to continue.

2022 Predictions

While we expect all industries to show increased loan amounts in 2022, industries heavily reliant on new construction, including residential building construction, plumbing, heating, air-conditioning contractors, building equipment contractors, and residential modelers will all experience higher-than-usual operating and supply costs. This is turn is likely to lead to high startup or refinancing costs and an increase in the average SBA loan amount in these industries.

If you’re trying to finance an operation for less than $350K, or just looking for a way to make your 30% SBA loan down payment, be sure to check out all of Guidant’s funding methods. Our 10-step SBA loan application process has had great success for applicants seeking less than $350K. Applicants also usually qualify for 401(k) business financing. Learn more on our funding solutions page.

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