Q2 2026: SBA Default Note Recovery Rates Trending Up

Platform-wide data shows recovery rates on SBA defaulted notes improved by approximately 4.2% in Q2 2026 compared to Q1.

The improvement was driven primarily by increased buyer activity in the hotel and healthcare verticals, where institutional buyers have shown strong appetite for distressed assets with recoverable collateral value. Average time-to-close also decreased slightly quarter-over-quarter, which analysts attribute to the platform's expanded broker network and faster NDA turnaround introduced earlier this year.

Breaking the numbers down further, hotel-vertical notes saw the largest quarter-over-quarter improvement in recovery rate, followed closely by healthcare. Both verticals benefited from a combination of stabilizing underlying real estate values and a deeper pool of buyers actively bidding, which tends to compress the gap between asking price and final sale price in a healthy way for sellers.

Self-storage and convenience store assets also posted modest gains, continuing a steadier, less volatile trend line than the hotel and healthcare categories. Restaurant-backed notes remained roughly flat quarter-over-quarter — a pattern the data team notes is consistent with a smaller, more specialized buyer pool for that vertical relative to the others tracked on the platform.

It's worth noting that recovery rate is only one lens on marketplace health; the team also tracks bid participation rate (how many active listings receive at least one bid within 30 days) and average days-to-close as complementary indicators. Both of those metrics also trended positively in Q2, reinforcing that the recovery rate improvement reflects broader marketplace liquidity rather than a small number of unusually strong individual sales.

Halo Loan Xchange will continue publishing quarterly recovery rate insights as more data becomes available, with the Q3 2026 report expected in early October.