Business Loan Charge-Off Rate - Historical Chart
Charge-Off Rate on Business Loans, All Commercial Banks, Seasonally Adjusted. Gray shaded areas indicate U.S. recessions.
Source: Federal Reserve Bank of St. Louis (FRED), Series CORBLACBS. Shaded areas = NBER recession dates. Updated 2026-03-09.
What the Q4 2025 Data Shows
At 0.55%, the business loan charge-off rate in Q4 2025 is above the 10-year average of 0.37% by 0.18pp. The reading has been mixed recently, fluctuating without a clear directional trend over the past 4 quarters.
The business loan charge-off rate (FRED series CORBLACBS) measures the share of commercial and industrial loans at U.S. banks that have been declared uncollectible and removed from the bank's books. Unlike delinquency, which captures loans that are late, charge-offs represent actual realized losses -- money the bank will never get back.
Banks typically charge off a loan after 90-180 days of non-payment, or earlier if they determine the borrower has no ability to repay. The rate is expressed as an annualized percentage of average loans outstanding, so a 0.50% rate means the bank is losing about $5 out of every $1,000 in business loans per year.
This is a seasonally adjusted quarterly series that dates back to 1985. It is a key input to bank earnings forecasts, regulatory stress tests, and credit loss provisioning models (CECL).
What This Metric Measures
This page tracks the annualized percentage of business loans at all FDIC-insured commercial banks that have been written off as uncollectible (charged off) during the quarter. The data comes from the Federal Reserve Bank of St. Louis FRED database, series CORBLACBS, updated quarterly.
Historical Context
The all-time peak was 2.57% in Q3 2009 — roughly 4.7x the current level. The all-time trough was 0.12% in Q1 2022. During COVID-19 in 2020, the reading hit 0.59% (Q2 2020). Year-over-year, the metric has moved 7.8%.
Why It Matters
Charge-offs are the bottom line of credit quality. While delinquencies show stress building, charge-offs show losses crystallizing. For bank investors, rising charge-offs directly reduce earnings. For bank regulators, elevated charge-offs can trigger capital requirements that constrain lending capacity.
For business owners, high charge-off rates signal that banks are taking real losses on business loans, which makes loan committees more conservative. If banks are losing 1%+ on C&I loans, they will demand more collateral, shorter terms, and personal guarantees from new borrowers.
Bank Lending Standards: Tightening
The Federal Reserve's Senior Loan Officer Opinion Survey (SLOOS) shows that 8.9% net of domestic banks tightened standards for C&I loans to small firms in Q1 2026. Banks have now tightened for 15 consecutive quarters. When banks tighten, businesses that cannot qualify for traditional loans often turn to merchant cash advance products with effective APRs of 60–350%.
What This Means for Business Owners
Falling charge-offs are encouraging — fewer borrowers are falling behind, and credit conditions may loosen. But if you are still carrying expensive debt, an improving aggregate number does not change your individual cash flow.
Charge-Off Rates by Loan Type - Q4 2025
Charge-off rates across all major loan categories at U.S. commercial banks:
| Category | Current | Prior Period | Year Ago | Change |
|---|---|---|---|---|
| Business Loans ★ | 0.55% | 0.57% | 0.51% | 0.02pp ↓ |
| Credit Cards | 4.11% | 4.18% | 4.58% | 0.07pp ↓ |
| Real Estate | 0.08% | 0.10% | 0.12% | 0.02pp ↓ |
| Consumer Loans | 2.81% | 2.89% | 2.98% | 0.08pp ↓ |
| All Loans (total) | 0.58% | 0.62% | 0.65% | 0.04pp ↓ |
Source: Federal Reserve FRED. All rates seasonally adjusted. ★ = primary focus of this page.
Business Loan Charge-Off Rate - Frequently Asked Questions
The business loan charge-off rate is 0.55% as of Q4 2025, per FRED series CORBLACBS. This is an annualized rate measuring actual losses on C&I loans at all U.S. commercial banks.
Delinquency means a loan is late (30+ days past due). Charge-off means the bank has given up on collecting and written the loan off as a loss. Delinquencies lead charge-offs by 1-3 quarters, since banks exhaust workout options before writing off a loan.
The all-time peak was 2.57% in Q3 2009. During the Great Recession, charge-off rates spiked as widespread business failures overwhelmed bank workout departments.
The rate moved down by 0.02pp from Q3 2025 to Q4 2025. The reading has been mixed recently, fluctuating without a clear directional trend over the past 4 quarters.
FDIC regulations require banks to charge off C&I loans when they are deemed uncollectible, typically after 90-180 days of non-payment. Banks can also charge off earlier if bankruptcy filing or business closure makes recovery unlikely. Partial charge-offs are common when some recovery is expected.
FRED series CORBLACBS, from the Federal Reserve Board of Governors quarterly Charge-Off and Delinquency Rates release. Covers all FDIC-insured commercial banks. Seasonally adjusted.