Small Business Lending in the United States 2013

Office of Advocacy

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Small Business Lending in the United States 2013

by Victoria Williams Office of Advocacy U.S. Small Business Administration

Release Date: December 2014

Created by Congress in 1976, the Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. Appointed by the President and confirmed by the U.S. Senate, the Chief Counsel for Advocacy directs the office. The Chief Counsel advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policy makers. Economic research, policy analyses, and small business outreach help identify issues of concern. Regional Advocates and an office in Washington, D.C., support the Chief Counsel's efforts.

For more information on the Office of Advocacy, visit advocacy, or call (202) 205-6533. To receive email notices of Office of Advocacy research and news, sign up for Advocacy's three email lists at USSBA/subscriber/new?topic_id=USSBA_183.

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Foreword

Small businesses are the nucleus of the U.S. economy, and they make up over 99 percent of employer firms in the United States. Financing is essential for small business survival and growth, as well as for the nation's fiscal health. Small Business Lending in the United States reviews recent national and local small business lending trends using information from depository lending institutions. This is the 20th annual edition of this study.

During the last few years, signs of economic recovery emerged as some economic indicators improved, but small firms' recovery has been much slower than large firms. For example, for the first time since the end of the financial crisis, both the dollar amount and volume of small business loans have been in positive territory simultaneously. While this represents a long-awaited improvement, it also shows that that the pace of recovery for small firms has been uneven over the last 15 quarters.

The lending industry continues to be affected by mergers and acquisitions. A total of 6,403 consolidated depository institutions filed Call Reports in June 2013, which was 236 fewer than the previous year. These institutions had a total of $585.3 billion in outstanding loans in 2013, a slight decline of less than half a percent, and an improvement from the previous year's 4.3 percent decline.

Overall, the analysis of the Call Report and CRA report data show that downward pressure on small business lending is easing. The Call Reports showed a small decline in the balance of small business loans, while the CRA data showed an increase in the value of these loans for the first time since the downturn.

As always, we welcome your feedback. Questions and other input should be addressed to Victoria Williams, economist, at (202) 205-6533 or advocacy@.

Winslow Sargeant, Ph.D. Chief Counsel for Advocacy U. S. Small Business Administration

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Acknowledgments

The 20th edition of Small Business Lending in United States was written and compiled by Victoria Williams, economist. George Haynes of Montana State University prepared the data for the analysis under contract to the Office of Advocacy. The report was edited by Rebecca Krafft, senior editor. Erik Gulbrandsen, communications and congressional liaison, prepared the report for online dissemination.

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Contents

Foreword ....................................................................................................................................................1 Acknowledgments ......................................................................................................................................2 Definitions ..................................................................................................................................................7 Introduction ................................................................................................................................................9

Comparison of Call Report and CRA Data ................................................................................. 10 Data Update through June 2014 ...............................................................................................................12 Part One: Developments in Small Business Lending...............................................................................13

I. Findings from the June 2013 Call Reports ....................................................................................13 A. Small Business Loans Outstanding from all Reporting Lending Institutions ........................ 13 B. Small Business Lending by Size of Lender ............................................................................ 15 C. Volume of Loans .................................................................................................................... 16 D. Small Business Lending Measures: The Total Asset Ratio and Total Small Business Loan Ratio ............................................................................................................................................ 17 E. All Small Loans Outstanding from Multibillion-dollar Lending Institutions......................... 20

II. Findings from 2012 CRA Reporting Institutions .........................................................................23 A. Small Business Lending by CRA Reporting Lending Institutions......................................... 23 B. Micro and Macro Business Lending by CRA Lending Institutions ....................................... 25

Conclusions .......................................................................................................................................25 Part Two: Directory of Top U.S. Small Business Lenders ......................................................................26 Appendix: Data Sources, Limitations, Ranking Methodology and Table Descriptions ..........................30

Data Sources......................................................................................................................................30 Data Limitations................................................................................................................................30 Ranking Methodology.......................................................................................................................31 Table Descriptions ............................................................................................................................33

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