“Small business growth and survival depends on access to credit. Therefore, credit access is a major concern for many businesses, especially start-ups and small businesses who have limited access to financial markets. This serious policy issue intensifies during economic downturns and expansions,” reads the Small Business Lending in the United States, 2020 report by the SBA Office of Advocacy.“The U.S. banking system, a major supplier of capital to small businesses, is an important participant in the process. Banks, amongst other lenders, were instrumental in distributing the Paycheck Protection Program (PPP) to small businesses during the pandemic.”
Using data from the Federal Deposit Insurance Corporation, the Office of Advocacy found that small ($1 million and under) and large (over $1 million) lending increased by double digits from June 2019 to June 2020.
Here are the key facts from the report:
• Small business loans as a share of total loans increased to 22.7% in June 2020 after experiencing a downward trend throughout the past decade.
• The value of total outstanding small business loans increased by 39% ($250.7 billion) from 2019 to 2020.
• The increase in the value of outstanding commercial and industrial loans of $100,000-$250,000 increased by over 100%.
• Depository lenders with total assets between $1 and $10 billion has a 35% increase in the percentage of the value of small business loans to total assets. They also had a 19% increase in the percentage of small business loans to total business loans.
• Lenders with total assets of $50 billion or more had an absolute increase in the value of outstanding loans by $95 billion.
• Larger depository lenders (total assets of $10 billion or more) held a 58% share of outstanding small business loans while smaller depository lenders held a 42% share.
• The value of loan originations and purchased reporting in the Community Reinvestment Act report increased by nearly 4% from 2018 to 2019.
• The number of loan originations and purchases increased by almost 8% according to the CRA report.
Source:
Small Business Lending in the United States, 2020 Report
Report Summary
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About the U.S. Small Business Administration
The U.S. Small Business Administration makes the American dream of business ownership a reality. As the only go-to resource and voice for small businesses backed by the strength of the Federal Government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.
