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http://arks.princeton.edu/ark:/88435/dsp014f16c5898| Title: | Small business lending deserts and oases |
| Contributors: | Pradhan, Archana Silver, Josh |
| Keywords: | Small business—United States—Finance United States—Race relations—Economic aspects Banks and banking—United States Discrimination in banking—United States |
| Issue Date: | Sep-2014 |
| Publisher: | National Community Reinvestment Coalition |
| Place of Publication: | Washington, D.C. |
| Description: | Small businesses employ most of the workers in the United States and are therefore key to economic growth and recovering from the Great Recession. Despite this, barriers to credit remain for small businesses. This study assesses disparities in access to credit by geography and demographic characteristics of the small business. This report finds the following trends: Private-Sector Lending • On a national level, lending levels have plummeted since the Great Recession. In 2007, banks issued 13.4 million small business loans, and 61.6 percent of the small businesses received loans. By 2012, banks made just over 5 million loans, and 16.4 percent of the small businesses received loans. • Disparities in lending are significant across the country. Grouping counties by quintile reveals that only 7.5 percent of small businesses in the lowest or worst quintile of counties received loans while 21.3 percent of the small businesses in the best quintile received loans during 2012. • Counties in the West and East Coasts tend to be in the best quintiles and can be considered “oases” in terms of access to small business loans, while counties in the Midwest and South tend to be in the worst quintiles and can be considered “deserts.” • Lending levels are even lower when considering the smallest businesses or those less than $1 million in revenue. Just ten percent of the smallest businesses received loans during 2012 compared to 16 percent of all small businesses. • Considering the number of loans, credit card loans were about 72 percent of all small business loans and ranged from 48 to 72 percent of loans across counties. While credit card loans serve legitimate credit needs, concerns arise when certain counties receive disproportionate numbers of credit card loans. In these instances, it would be desirable to strive for more of a balance between credit card and lower interest-rate non-credit card loans. |
| URI: | http://arks.princeton.edu/ark:/88435/dsp014f16c5898 |
| Related resource: | https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwit7YzjzsfpAhXDct8KHbGpBz0QFjAAegQIARAB&url=https%3A%2F%2Fncrc.org%2Fwp-content%2Fuploads%2F2014%2F09%2Fncrc-analysis-small-business-lending-deserts.pdf&usg=AOvVaw2akHGkYO8sXf5zgiT7Huy- |
| Appears in Collections: | Monographic reports and papers (Publicly Accessible) |
Files in This Item:
| File | Description | Size | Format | |
|---|---|---|---|---|
| ncrc-analysis-small-business-lending-deserts(1).pdf | 4.06 MB | Adobe PDF | View/Download |
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