BayFirst ends its small balance SBA loan program  

Administrators at St. Petersburg-based BayFirst Financial, the parent company of BayFirst Bank, have decided to shut down Bolt, one of its main Small Business Administration (SBA) loan programs, due to increased charge-offs and late payments. 

The SBA is a federal government entity that supports small businesses through collaborating with banks and lending institutions around the country. These organizations provide loans to business owners, while the SBA offers a guarantee of a certain percentage for each loan in case the owner cannot pay it back. 

Bolt, which was first introduced in June 2022 by BayFirst, provided small balance loans (up to $150,000) to small business owners nationwide. These loans were primarily used for working capital. 

“As we went through 2022 and 2023, the interest rate environment rose 5¼ percent over some 16 to 18 months, and that caused tremendous headwinds for small businesses as their loan payments nearly doubled and it impacted their cash flow,” BayFirst Financial CEO Thomas Zernick explained to the Catalyst.

Higher interest rates put a “strain” on the Bolt program.  

“As we entered this year, it was exaggerated as businesses faced quite a bit of uncertainty with tariffs and understanding their cost of goods and their distribution channels,” he continued. 

All of these factors led to a rise in “delinquencies and losses” in the small balance SBA program, Zernick said. “Our bank, in discussions with our board, made a difficult, but necessary decision.” 

Bolt’s discontinuation will result in the loss of 26 jobs directly related to the program. Another 25 employees “in other areas of the bank which supported” Bolt will be let go, reducing the financial institution’s annual costs by about $6 million, Zernick added.  

The mass layoff started Aug. 4 and will continue until Oct. 4, according to a Worker Adjustment and Retraining Notification notice. 

BayFirst’s Bolt program helped the bank become a national leader in SBA loans. It provided 3,187 of these loans to clients in fiscal year 2024 and ranked 11th in the country. 

“We were very successful with it and produced quite a bit of volume with the program,” Zernick said. 

BayFirst will continue to offer larger SBA loans, he added. “We’re still supporting small businesses, we’re just not playing in the microspace that we did through our Bolt program.” 

Zernick remains optimistic about the bank’s future. 

“This decision allows us to prevent future losses to the company by exiting a loan-origination product that we experienced higher than expected losses in,” he explained. 

“By eliminating this, it’s going to allow us to focus our attention on continuing to grow our community bank throughout the Tampa Bay marketplace.”