Small Business Lending Decline Slows
Total small business borrowing from depository lenders remained subdued for both commercial real estate and commercial and industrial loans under $1 million, while large business borrowing increased, according to the SBA Office of Advocacy’s study “Small Business Lending in the United States, 2012,” a yearly review of the small business lending activities of depository lending institutions in the United States.
“While overall small business lending continues to decline, we are not seeing the sharp decline we saw in recent years. More importantly, the study shows an increase in the number of small business loans which underscores the positive turn in our country’s economic landscape,” said Dr. Winslow Sargeant, chief counsel for advocacy.
Overall findings from the study include:
•The total number of small business loans increased from 21.3 million in June 2011 to 23.5 million in June 2012.
•The total small business loans outstanding continued to decline, but only by 3.1% this year as opposed to 6.9% last year.
•While large business borrowing increased, total small businesses borrowing from depository lenders remained weak for both commercial real estate and commercial and industrial loans under $1 million.
•However, C&I lending in amounts under $100,000 was up in both the number and amount of loans for the first time since 2010.
The report analyzes data from Consolidated Reports of Condition and Income as well as reports required by the Community Reinvestment Act. These two data sets are the only timely information that looks at the lending environment of small business by multinational lenders and lenders at a local level. Because data is only available for the size of the loan not the size of the business, small business loans are defined as loans under $1 million throughout the report.
To read the full report click here.