Charleston-area small businesses got far fewer loans through the U.S. Small Business Administration’s main lending program in the federal fiscal year that ended Sept. 30.

Lenders approved 137 loans under the SBA’s 7(a) program for businesses in Berkeley, Charleston and Dorchester counties in fiscal 2026, down 36% from 213 a year earlier, according to a Charleston Business Report analysis of the agency’s loan-level records, which it updated Oct. 30. The loans totaled $89.9 million, down 17% from $108.9 million.

The region fell harder than the state or the nation. South Carolina’s loan count fell 27%, to 678, and its dollar total fell 9%, to $458.9 million. Nationally, the count fell 28%, to 56,130, and dollars fell 13%, to $32.4 billion.

The SBA announced those national totals Nov. 2. It said its combined lending through the 7(a) program and its 504 real estate and equipment program was the third-highest in its history, despite a 43-day federal shutdown. Administrator Kelly Loeffler said the agency “delivered its third-highest loan volume on record.”

The slowdown started before the shutdown

The shutdown accounts for part of the drop. The records show no 7(a) approvals anywhere in the country from Oct. 1, 2025, until approvals resumed Nov. 13. The SBA estimated that about $5 billion in loans could not be guaranteed during the pause.

But the decline began months earlier. Lenders approved an average of 19 loans a month for Charleston-area businesses from October 2024 through May 2025. In the 15 months of lending since, leaving out the shutdown month of October 2025, the average was 13. Nationally, the monthly average fell 29%, to about 5,100 from about 7,200.

The break came in June 2025, when a rewrite of the SBA’s lending rules, known as SOP 50 10 8, took effect, according to the SBA. The rewrite brought back a 10% equity requirement for borrowers financing a startup or the purchase of a business, and tightened rules on personal guarantees and on who qualifies for small loans, American Banker reported in October. Charleston-area approvals fell to four in June 2025, from 26 in May.

Borrowers also rushed to close loans before the shutdown, American Banker reported, citing a study by the Lumos Group. Lenders approved 27 Charleston-area loans in September 2025, up from 15 in August.

Small loans shrank, big loans didn’t

The decline in the number of loans fell entirely on smaller ones. Loans of $1 million or less dropped to 112 from 188, and their total fell to $31 million from $52.8 million.

Loans of more than $1 million held at 25 in both years, and their total rose to $58.9 million from $56.1 million. That pushed the average loan to $656,000, from $511,000.

At the low end, loans of $150,000 or less fell to 55 from 85. Loans of more than $150,000 up to $500,000 fell to 34 from 74, the steepest drop of any size group.

The national pattern was similar. Loans of $150,000 or less fell 37%, while the number of loans over $1 million slipped 1%.

County by county

Charleston County businesses received 86 loans, down from 127, but their dollar total rose 5%, to $66.3 million, from $63.1 million. Berkeley County’s count fell to 36 from 56, and its total to $18.4 million from $31.7 million. Dorchester County’s fell to 15 from 30, and its total to $5.2 million from $14 million.

The two largest loans, $5 million each, went to a hotel in Charleston and a child care business in Mount Pleasant.

Startups held up better than other borrowers. Lenders made 33 loans to businesses the records list as startups, down from 42, and the dollars were about the same, $22.5 million. Loans to buy existing businesses fell to 21 from 32, and loans to businesses more than two years old fell to 62 from 107.

Professional, scientific and technical firms borrowed the most, $15.2 million on 16 loans, followed by hotels and restaurants, with $14.2 million on 17. Franchise businesses received 33 loans, about a quarter of the total.

Fewer lenders, and fewer local ones

Forty-four lenders made at least one loan in the region, down from 50. Newtek Bank made the most, 18, for $4.2 million. Huntington National Bank, the leader a year earlier with 35 loans, made 15. TD Bank made 13.

Live Oak Banking Co. of Wilmington, N.C., lent the most money, $12.9 million on six loans. Lenders based in South Carolina made four loans, down from 11. Beacon Community Bank, which the records list in Mount Pleasant, made two, down from eight.

The average starting interest rate on the region’s loans fell to 9.55%, from 10.27%.

In the 504 program, which pairs a bank loan with SBA-backed financing, the region had eight loans with $8.6 million in SBA-backed debentures, compared with six loans and $15.5 million a year earlier.

What comes next

The rules changed again Oct. 1, when an updated version of the lending rulebook took effect, according to the SBA. American Banker reported that it requires a CPA-prepared review of earnings for acquisitions of more than $3 million, tightens debt-service requirements and requires lenders to underwrite loans on past earnings rather than projections. The publication also cited the administration’s decision to bar lawful permanent residents who aren’t citizens from SBA loans.

What the numbers don’t show

The counts are approvals. Some approved loans are later cancelled: 18 of the region’s fiscal 2026 loans and 34 of its fiscal 2025 loans have been. The analysis counts them all, as the SBA does in its national totals. Lenders estimated the region’s fiscal 2026 loans would support 1,455 jobs, down from 2,005, but the SBA doesn’t verify those figures.

How we did this

We downloaded the SBA’s 7(a) and 504 loan records for fiscal 2020 through fiscal 2026, as of Sept. 30, 2026, from the agency’s open data site and selected loans whose project county was Berkeley, Charleston or Dorchester County in South Carolina. We compared approvals by fiscal year, month, loan size, county, business age, industry and lender, and counted cancelled loans in the totals. Our national 7(a) totals for fiscal 2026 match those the SBA announced Nov. 2. Monthly averages compare October 2024 through May 2025 with June 2025 through September 2026, excluding October 2025, when no loans were approved. Lender locations are those listed in the records. The dates of rule changes come from the SBA’s rulebook page; descriptions of the changes come from American Banker.