Study Ranks Banks on Small Business Lending

The growth of small and microbusiness lending remained positive during the first half of 2008, although the expansion was slower than in the previous year, according to the latest edition of the Office of Advocacy’s annual study of lending to small firms.

This new report, “Small Business and Micro Business Lending in the United States for Data Years 2007- 2008,” (http://www.sba.gov/advo/research/sbl_08study.pdf) gives a detailed account of small business lending overall, plus state-by-state totals and totals for individual lenders.

The study finds that for the year that ended in June 2008, the total value of small business loans outstanding increased 4% and the value of microbusiness loans outstanding increased 6.8%. Both rates were down from the previous one-year period, but they were still in positive territory.

The largest increase was in the number of microbusiness loans (under $100,000), which were up by 15.7%. This may be an indication that more loans are being made through business credit cards. The number of mid-sized loans ($100,000 to $1 million) fell by 23.3%.

The report uses the most recent Consolidated Reports of Condition and Income (Call Report) data for June 2007 to June 2008 and Community Reinvestment Act (CRA) data for 2007 to examine financial institutions’ small and microbusiness lending. Small business loans in these data are business loans of less than $1 million and microbusiness loans are loans of less than $100,000. The report ranks lenders on their overall small business lending, not lending under SBA programs.

The full study, including expanded state-by-state tables, is available online at http://www.sba.gov/advo/index.html.

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