M&T Takes Top Rochester SBA Lender Spot, Rises to No. 5 in US

What happened

M&T Bank was the leading small business lender in the Rochester market in fiscal 2026. According to U.S. Small Business Administration data, it made 96 loans worth $12.6 million7. The Buffalo-based bank ranked first locally by both loan count and dollar volume7. Live Oak Banking Co., a digital lender that focuses on small businesses, was second with only three loans totaling $8.2 million, and ESL Federal Credit Union was third with 74 loans totaling $7 million7.

The local result came alongside a strong national year for the bank. M&T says it approved 2,975 SBA 7(a) loans totaling $326.44 million in the federal fiscal year that ended Sept. 301. That was 274 more loans and $32.5 million more than in fiscal 2025, roughly 10% growth on both measures1. The bank moved up from seventh to fifth among SBA 7(a) lenders nationally and has now spent 18 straight years among the program's top lenders1. M&T also ranked first by loan count in 10 SBA districts and placed in the top three in all 15 districts where it reports results1.

Growth while the program shrank

The most notable part of the story is the market M&T grew in. The bank says SBA 7(a) loan volume fell 26% industrywide from the prior year and total lending dollars fell 12%1. Regional and trade coverage repeated those figures, crediting them to the bank710. Investor-focused coverage described the record as coming during broad market softness in SBA lending35.

The two national figures say something about the borrowers who did get loans. When loan counts fall more than twice as fast as dollars, the average loan has to get bigger. That suggests fewer, larger deals went through the program in fiscal 2026 and smaller borrowers dropped out faster. M&T's average is around $110,000 per loan, which puts it near the small end of the market. Its 2024 newsroom post put the bank's average loan at about $113,00028.

The Rochester numbers show the same contrast. Live Oak's three loans averaged more than $2.7 million each, while M&T's 96 averaged about $131,000 and ESL's 74 averaged under $100,0007. The dollar ranking therefore mixes two kinds of lending. One is a small number of large, specialized deals. The other is steady, branch-based lending to the kinds of businesses most local owners run. On loan count, M&T and ESL together account for nearly all of Rochester's top-three activity.

A reversal from two years ago

M&T's first-place finish in Rochester is a change. In fiscal 2024, the Rochester Business Journal's list was led by ESL and another local lender. M&T was first only in the combined Buffalo/Rochester district, with 186 loans totaling about $18.9 million27. This year the bank leads in Rochester itself, and its combined-district total rose to $28.8 million71.

The reports don't agree on one figure. The Rochester Business Journal says M&T made 266 loans in the Buffalo/Rochester district7, but the district table in M&T's own announcement lists 226 loans for the same $28.8 million2. The local story also gives two different end dates for the fiscal year, Sept. 26 and Sept. 307. The bank's release uses Sept. 301. The dollar amount is consistent across reports, and the bank's 226 looks like the more reliable loan count. Either way, the district's loan count is clearly well above its fiscal 2024 level.

M&T has also expanded well outside upstate New York. It says its 7(a) approvals in New England rose from 107 in fiscal 2022 to 588 in fiscal 202629. Some of the bank's national climb comes from adding new territory, not only from gaining share in its home markets.

The owners on the other side of the desk

The lending figures look strong, but owners are more cautious. The NFIB Small Business Optimism Index fell 0.8 points in September to 97.9, just below its 52-year average of 98.011. NFIB's Uncertainty Index rose to 90, far above its historical average of 6814. Bill Dunkelberg, NFIB's chief economist, said owners are moving carefully as they work out how rising costs, interest rates and hiring difficulties affect their businesses11.

The details matter for lenders. Only a net 7% of owners said it was a good time to expand, down 5 points in one month17. The share planning capital outlays in the next six months fell to 22%13. TD Economics noted that six of the ten index components fell, with the biggest drop in the share of owners expecting the economy to improve12. The American Bankers Association's economists said slower expansion plans could reduce demand for small business credit, and that inflation and labor costs could squeeze margins and owners' ability to service debt17.

This gap helps explain the SBA results. Owners who are less willing to expand will borrow less, which likely accounts for part of the national drop in 7(a) volume. M&T grew anyway, which suggests it took business from other lenders in its markets more than it benefited from rising demand.

Costs are the real pressure point

Rising costs show up across the survey. Inflation was named the single most important problem by 20% of owners, up 4 points and far above its historical average of 7%13. Labor quality or availability was the top problem for the third month in a row, cited by 26%14. Among owners reporting lower profits, 24% blamed higher material costs, up 8 points from August13. NFIB's own analysis pointed to fuel, energy and other inflation-driven costs as reasons optimism slipped14.

Borrowing is also getting more expensive. A net 8% of owners said they paid a higher rate on their latest loan, the highest share since June 2025, and the average rate on short-term loans rose 0.7 points to 8.2%13. NFIB's commentary says the Federal Reserve raised its policy rate13. TD Economics says markets expect more tightening in the months ahead12. At the same time, only 22% of owners said they borrow regularly, well below the historical average of 34%13. Just 3% named financing and interest rates as their top problem13, so for most owners the cost of credit is not yet the main worry.

M&T's main customer example shows how high costs can lead owners to borrow. A Baltimore maritime services company used $5.7 million in SBA 504 financing to buy a building after rising lease costs made owning look better than renting2. The owner said the goal was to keep working capital available2. That reasoning is likely to come up more often when inflation is the second-biggest complaint on Main Street.

Where business credit cards fit

For many small firms, the alternative to an SBA loan is a business credit card, and those are expensive once promotional periods end. A sample of major business cards shows ongoing variable APRs from about 17% to nearly 29%3235. One comparison noted that post-promotional rates across 2026 cards range from about 16.74% to 28.49%, depending on credit31. Some issuers advertise 0% introductory periods of up to 18 billing cycles, but after that the regular rate applies to any remaining balance.

Regional banks often price their cards lower. NerdWallet listed M&T's business credit card with a 12-month 0% intro offer on purchases and balance transfers and an ongoing APR of 13.74% to 20.74%, based on rates as of February 202632. Even that range is well above the 8.2% average short-term loan rate NFIB reported13. Owners who carry card balances to cover rising costs are paying much more than they would on government-backed credit.

The practical point is that an SBA loan is often the cheaper option, but getting one takes more paperwork and time than using a card. Lenders that close many small SBA deals reduce the pressure on owners to put working capital on cards. That is why M&T's loan count says more about its value to the community than its dollar ranking does.

What it means for investors and the region

Investor commentary treats the SBA record as a sign of strength in M&T's business banking, though not a major factor for earnings. Simply Wall St said the bigger near-term issues are funding costs, deposit competition and 2026 noninterest expense guidance of $5.5 billion to $5.6 billion5. Its analysis also suggested that strong small business lending shows real loan demand and opportunities to sell customers other products5. On this point the coverage generally agrees: the SBA results help M&T's reputation more than its earnings.

For Rochester, M&T's lead means small business credit is flowing through a large regional bank while overall program activity declines. Credit unions are also expanding. RBJ reported that The Summit Federal Credit Union recently launched a business lending program7. With more lenders competing, local owners may have more options, but rising costs and uncertainty could still hold borrowing down.

The takeaway

M&T's ranking is a real competitive gain. It came while SBA lending was shrinking, owners were getting less optimistic, costs were rising and borrowing rates were going up. The bank grew by taking a larger share of a smaller market, not because demand rose. Fiscal 2027 will test whether M&T can keep growing if NFIB's high uncertainty readings continue to hold back expansion plans, and whether credit unions and digital lenders take back ground in Rochester.