Small Business Lending Increasing

Lending by the most important institutional supplier of credit to small firms-commercial banks-increased in 2002-2003, according to a report released today by the Office of Advocacy of the U.S. Small Business Administration (SBA).
The report allows small businesses to see which specific banks, by state, are most active in lending to small businesses.
“Information about which banks are making small loans is critical to the health of small businesses,” said Dr. Chad Moutray, Chief Economist for the Office of Advocacy. “This kind of information helps small businesses save time and shop efficiently for credit-and it also helps the banking sector understand the competition in their markets.”
Four sets of tables rank large Bank Holding Companies (BHC) and commercial banks nationally and by state. For example, the highest ranking bank based here in Tennessee is Union Planters Bank, which ranks 8th nationally among large banks. (Note: Union Planters is in the process of merging with Regions Bank, which ranks 3rd nationally).
Findings also include:
– Small business loans outstanding (loans under $1 million) totaled $495 billion as of June 2003, an increase of $11.1 billion or 2.3 percent between June 2002 and June 2003, compared with an overall increase of 5.1 percent over the previous period.
– In 2002, a total of $227.5 billion in small business loans under $1 million were extended by 905 CRA-reporting banks/BHCs, compared with $203 billion in 2001. Large multi-billion-dollar banks and BHCs made 5.3 million micro business loans valued at $73 billion in 2002, compared with $4.9 million loans valued at $62 billion in 2001.
– The CRA data confirm the findings in the Call Report data of the importance of multi-billion-dollar banks and BHCs in the market for the smallest loans.
Knowing which banks work best with small businesses can be a daunting task for entrepreneurs. This type of data can really help cut through the marketing hype and allow entrepreneurs to focus on talking with banks that have a history of working with smaller companies.