UPDATE: This story now includes quotes from an interview with BayFirst CEO Thomas Zernick.
A week after reporting a second consecutive quarterly loss, Florida-based BayFirst Financial has shuttered the small-dollar Small Business Administration lending program that’s at the heart of its problems.
BayFirst announced late Monday it has terminated its Bolt loan program. As part of the decision, the $1.3 billion-asset BayFirst laid off its 26-person Bolt team, plus 25 employees from other parts of the bank. The staffing cuts are expected to produce $6 million in annual savings, though terminating Bolt will also generate an undisclosed amount of near-term costs that are expected to be recognized as a restructuring charge during the third quarter.
“I would tell you that businesses today are facing tremendous headwinds,” BayFirst CEO Thomas Zernick told American Banker Tuesday. “Whether it’s uncertainty caused by the tariffs, cost-of-goods spikes, difficulty in employment, they’re struggling across the board. Lending into the [small-dollar] space didn’t make sense, given the macroenvironment we’re in today.”
Bolt offered borrowers around the country SBA-guaranteed working capital loans of up to $150,000 — a relatively modest amount — through the agency’s 7(a) loan guarantee program. As of June 30, BayFirst said it had originated more than 6,700 Bolt loans for $870 million since 2022.
Zernick said Monday in a press release that Bolt’s termination stemmed from “a comprehensive strategic review to reduce risk from unguaranteed SBA 7(a) loans and position the company for long-term growth.” The SBA guarantees up to 85% of 7(a) loans, leaving lenders responsible for the remaining unguaranteed portion.
BayFirst said it hopes to sell its Bolt loan balances and the Bolt origination platform. To further cushion the financial shock, it announced it would halt payment of dividends. The company’s directors have also agreed to forgo their fees.
Moreover, in announcing its second-quarter earnings last week and again on Monday, Saint Petersburg-based BayFirst said it would weigh “strategic alternatives,” though executives didn’t specify how wide-ranging their evaluation would be.
“We want to make sure we give that thoughtful consideration and model out all kinds of different scenarios to make the best decision to get us back on track in earnings and going up and to the right,” President and Chief Operating Officer Robin Oliver said on a July 30 conference call with analysts.
BayFirst reported a second-quarter loss totaling $1.2 million after losing $300,000 for the quarter that ended on March 31. The company recorded provisions totaling $11.7 million in the first six months of 2025, compared with $7.1 million during the same period in 2024. It reported charge-offs of $11.1 million between January and June, compared with $7 million during the same six months in 2024.
The majority of BayFirst’s problem loans reside in its Bolt portfolio, Oliver said on the conference call. More specifically, Oliver singled out older-vintage Bolt loans originated prior to the run-up in interest rates during 2022 and 2023.
“The older ones, vintages that started at lower rates, definitely have had stress and are struggling to keep up with the payments,” Oliver said on the conference call.
BayFirst isn’t exiting SBA lending entirely. It will continue to make larger loans, which have performed better than the Bolt credits, according to Oliver. “I think you have different types of borrowers, more sophistication in the financial statements, and things of that nature with some of those larger borrowers,” Oliver said.
Powered by Bolt, BayFirst has ranked among the country’s most active SBA lenders in recent years. Through the first 10 months of the agency’s 2025 fiscal year, it originated more than 1,900 7(a) loans for about $1.9 billion. Like many prolific SBA lenders, BayFirst sells much of its production to investors, generating noninterest income.
This isn’t the first time BayFirst has found itself in choppy waters with a nationwide loan program. It exited national mortgage lending in September 2022, about three months after launching the Bolt program. As a result of the move, BayFirst reported a $3.1 million charge against its third-quarter 2022 earnings.
Much like Bolt, BayFirst’s mortgage business fell victim to changes in interest rates, according to Zernick. “We started to see mortgage rates rise significantly,” the CEO said Tuesday in the interview. “It just impacted the purchase business, it impacted the debt refinance business. We had to make another tough-but-necessary decision to just pull out of residential.”
BayFirst, which opened its doors in September 2000, operates 12 branches in the Tampa and Sarasota regions. In the wake of Bolt’s closure, the company plans to concentrate on “continuing to build a great, premier community bank here in Tampa Bay,” Zernick said in the interview. “We now have a very robust banking center network around Tampa Bay, which we believe is one of the strongest banking markets in the country.”