TD Bank's Dominance in SBA Lending as a Signal of Resilience in a Weak Market

In an economic climate marked by inflationary pressures, rising interest rates, and a fragile recovery, regional banks are under scrutiny. Yet, TD Bank's sustained leadership in SBA lending-ranking No. 1 in its Maine-to-Florida footprint for nine consecutive years-reveals a compelling story of resilience and strategic foresight. By dissecting TD Bank's performance, we uncover broader opportunities in regional banking and the critical role small business financing plays in stabilizing local economies.

The SBA Lending Powerhouse

TD Bank's dominance in SBA lending is not a recent phenomenon. For the SBA's 2025 fiscal year (October 1, 2024 – September 30, 2025), the bank approved 3,412 SBA 7(a) loans totaling $486 million in its core markets, according to a Morningstar report. This follows a similar performance in 2024, where it lent $663 million across 4,038 loans, according to a TD press release. These figures are not just numbers-they represent a lifeline for small businesses, from startup franchises to owner-occupied commercial real estate ventures.

What sets TD Bank apart is its geographic focus. It holds the No. 1 ranking in eight states, including New York, New Jersey, and Florida, while securing the No. 2 position nationally, the Morningstar report notes. This localized expertise allows it to tailor financing solutions to regional needs, a stark contrast to national banks that often prioritize scale over nuance.

Economic Resilience Through Small Business Support

Small businesses are the backbone of the U.S. economy, accounting for nearly half of private-sector employment. TD Bank's SBA lending strategy directly addresses this pillar. For instance, Ferrara Manufacturing leveraged SBA loans to expand its operations, acquiring a 50,000-square-foot facility and creating jobs, according to a Business Wire release. Such cases illustrate how SBA loans catalyze economic activity, even in downturns.

The broader economic impact is significant. SBA loans often fund high-impact sectors like healthcare, construction, and retail-industries that are resilient during recessions. By prioritizing these areas, TD Bank isn't just lending money; it's investing in sectors that sustain employment and community stability.

A Contrarian Play in Regional Banking

While some regional banks retreat from riskier ventures-BayFirst Financial Corp., for example, recently exited SBA 7(a) lending to reduce risk, according to a StockTitan report-TD Bank doubles down. This divergence highlights a critical investment insight: banks that align with small business needs are better positioned to weather macroeconomic headwinds.

The SBA 7(a) program itself is a low-risk, high-reward asset class. Loans are partially guaranteed by the government, reducing default risk for lenders. For regional banks, this creates a stable revenue stream while fulfilling a public mandate to support entrepreneurship. TD Bank's ability to consistently top this program suggests a mastery of risk-adjusted returns-a rare commodity in today's volatile market.

Investment Opportunities in Regional Banking

The case for TD Bank extends beyond its SBA success. Regional banks with strong small business portfolios are uniquely positioned to capitalize on two trends:

1. Digital Transformation: TD Bank's recent branch closures in Massachusetts and other states signal a shift toward digital-first banking, as reported in a Boston.com article. This reduces overhead and redirects resources to high-margin services like SBA lending.
2. Sector Diversification: By financing a mix of startups, acquisitions, and real estate, TD Bank mitigates sector-specific risks. For example, its focus on medical practices and franchises-industries with steady demand-ensures a diversified loan portfolio.

Investors should also note the regulatory tailwinds. The SBA's 7(a) program remains a cornerstone of small business policy, with no signs of contraction. As of 2025, the program's budget is fully allocated, ensuring continued demand for lenders like TD Bank, the Morningstar report says.

Conclusion: A Model for the Future

TD Bank's SBA lending dominance is more than a competitive advantage-it's a blueprint for economic resilience. In a weak market, where large banks retreat and fintechs struggle with trust, regional banks that prioritize small business growth will thrive. For investors, this means opportunities in institutions that combine localized expertise with strategic agility.

As the economy navigates uncertainty, TD Bank's story is a reminder: the future of banking isn't just about scale. It's about purpose.