Analysis: Small Business Lending Isn’t What It Used to Be
In an economic commentary, analysts Ann Marie Wiersch and Scott Shane from the Federal Reserve Bank of Cleveland noted that since the Great Recession bank lending to small businesses has fallen significantly.
The analysts said different views have emerged about the cause of the slowdown. Bankers say the problem rests with small business owners and regulators—business owners for cutting back on loan applications amid soft demand for their products and services, and regulators for compelling the banks to tighten lending standards (which cuts the number of creditworthy small business owners). Small business owners, in turn, say the problem rests with bankers and regulators—bankers for increasing collateral requirements and reducing their focus on small business credit markets, and regulators for making loans more difficult to get.
To read the full analysis click here.