Study Ranks Banks on Small Firm Lending, Hints at Current Trends

The statistics are in: Growth of small and microbusiness lending was positive during the first half of 2008, but it was slower than in the previous year. This is according to the latest edition of the Office of Advocacy’s annual study of lending to small firms: Small Business & Micro Business Lending in the United States for Data Years 2007-2008, which gives a detailed account of small business lending overall, plus state-by-state totals and totals for individual lenders. 

The report uses the most recent Consolidated Reports of Condition and Income (Call Report) data for June 2007 to June 2008 and Community Reinvestment Act (CRA) data for 2007 to examine financial institutions’ small and microbusiness lending.  Small business loans in these data are business loans of less than $1 million and microbusiness loans are loans of less than $100,000.  The report ranks lenders on their overall small business lending, not lending under SBA programs.

The Top 10 Large Institution Small Business Lenders

  1. American Express Bank
  2. Capital One Financial Corporation
  3. Regions Financial
  4. Synovus Financial Corp
  5. First Citizens Bancshares Inc
  6. BB&T Corporation
  7. Zions Bancorporation
  8. GMAC
  9. Fulton Financial Corporation
  10. Compass Bank

The Top 10 Large Institution Microlenders

  1. American Express Bank, FSB
  2. Capital One Financial Corporation
  3. JPMorgan Chase & Co.
  4. GMAC
  5. Citigroup Inc.
  6. Wells Fargo & Company
  7. U.S. Bancorp
  8. Bank Of America Corporation
  9. Regions Financial Corporation
  10. Manufacturers & Traders TC

The study finds that for the year that ended in June 2008, the total value of small business loans outstanding increased 4% and the value of microbusiness loans outstanding was up 6.8%. Both rates were down from the previous one-year period, but still in positive territory. The largest increase was in the number of microbusiness loans (under $100,000), which were up by 15.7%, which may indicate that more loans are being made through business credit cards. The number of mid-sized loans ($100,000 to $1 million) fell by 23.3%.

Small businesses that are looking for loans will find the report useful because it provides state-by-state rankings of banks and other financial institutions on their small business lending.  These rankings show who made the most small and microloans in each of the 50 states and the District of Columbia. “In the current financial climate, it’s especially critical for small firms to know which banks and financial institutions have been the most likely to make small and microbusiness loans,” said Advocacy Economist Victoria Williams, coauthor of the study with Senior Economist Charles Ou.

The full study, including expanded state-by-state tables, is available online at www.sba.gov/advo/research/lending.html.