Office of Advocacy www.sba.gov/advo Advocacy: the voice of small business in government Small Business and Micro Business Lending in the United States for Data Years 2008-2009 Office of Advocacy U.S. Small Business Administration December 2010 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 www.sba.gov/advo or call (202) 205-6533. Receive email notices of new Office of Advocacy information by signing up on Advocacy’s Listservs at http://web.sba.gov/list. þ ADVOCACY NEWSLETTER þ ADVOCACY PRESS þ ADVOCACY REGULATORY NEWS þ ADVOCACY RESEARCH Foreword This edition of the Office of Advocacy’s annual study of lending to small and micro businesses by most depository institutions in the United States continues the expanded coverage of previous editions. In addition to banks, other depository institutions such as federal and state savings banks and savings and loan associations are included. Geographic coverage includes the United States and its territories. The two types of data used in this study are based on reports made by depository institutions to their respective regulating agencies—Call Reports for June 2009 and Community Reinvestment Act (CRA) reports for 2008. Because a smaller number of institutions are required to submit CRA reports—only those with assets of $1 billion or more—the coverage of small business lending activities under CRA reporting is less than Call Report coverage. This study reports on the lending activity of 8,210 individual reporting depository institutions, 255 fewer than were covered in the 2008 report (see Table 5). While the number of depository institutions declined, the number of branches within banks increased, by 386. The report covers both small business and micro business lending by all reporting institutions, including very large institutions with billions of dollars in assets. Small business lending is defined in this report as loans of less than $1 million and micro business lending includes loans of less than $100,000, a subset of small business lending. Some information is also provided about the subset of larger small business loans between $100,000 and $1 million. Recent changes in financial markets, such as interest rate fluctuations and mergers of depository institutions, are likely to negatively impact small firms and could affect their access to credit. These issues should be closely monitored, and small firm access to funds should be assured. Data on the top institutions lending to small businesses in each state can be found in this report. Advocacy’s website contains expanded versions of tables 3A and 3B, listing the lending activity of all lenders in the 50 states, the District of Columbia, and U.S. territories. The information is useful to both small businesses in search of loans and lenders who seek to compare their lending with that of their competitors. The lending studies may also be viewed on the Office of Advocacy’s webpage, www.sba.gov/advo/research/lending.html. If you have questions or comments, please write to the Office of Advocacy, U.S. Small Business Administration, Mail Code 3112, 409 Third St., S.W., Washington, D.C. 20416, or fax (202) 205-6928. Technical questions may be addressed to Dr. George Haynes or Ms. Victoria Williams, at (202) 205-6530 or by e-mail: [email protected] or [email protected]. We welcome your comments and suggestions. Winslow Sargeant Chief Counsel for Advocacy U. S. Small Business Administration iii Small Business and Micro Business Lending in the United States, 2008-2009 Contents Introduction ......................................................................................................................... 1 Part One: Developments in Small and Micro Business Lending ........................................ 3 Part Two: Directory of Top U.S. Small and Micro Business Lenders ............................. 11 Appendix: Data Notes ....................................................................................................... 15 v Small Business and Micro Business Lending in the United States, 2008-2009 Introduction The key to small business survival continues to be access to credit, and the United States banking system is the main provider of credit to small businesses.1 The well-being and growth of small businesses depends on how lending institutions are meeting the needs of small firms. Knowing which lenders provide small business financing helps small businesses save valuable time in shopping efficiently for credit. Such information also helps lending institutions learn about the demand for and supply of small business credit, about the competition in the markets they serve, and about new investment opportunities. This annual edition of Small Business and Micro Business Lending in the United States provides information on lending institutions and their small and micro business loansfor data years 2008- 2009.2 For the fifth consecutive year, the study expands coverage of small business lenders to include other depository institutions such as savings banks and savings and loan associations in addition to commercial banks. The expanded geographic coverage includes information for the territories of Guam, American Samoa, Puerto Rico, and the U.S. Virgin Islands. The analysis in this study is based on two types of data reported by lending institutions to their respective regulating agencies—the Call Reports for June 2009 (for information on outstanding loans) and reports made under the requirements of the Community Reinvestment Act (CRA) for 2008.3 Both small and micro business lending are examined. Because data are available only by the size of the loan and not by the size of the business, the following definitions are used: • Small business loans are defined as business loans under $1 million. • Micro business loans are defined as business loans under $100,000 (the subset of small business loans that constitutes the smallest loans). • Larger small business loans are loans of $100,000 to under $1 million (the subset of small business loans that includes larger loans). The study consists of two parts. Part One discusses developments in small and micro business lending activities by lending institutions in the United States. The first section examines developments apparent in the Call Report data; the second looks at developments based on the 1 See Board of Governors of the Federal Reserve System, “Financial Services Used by Small Businesses: Evidence from the 2003 Survey of Small Business Finances,” Federal Reserve Bulletin, October 2006, Table 10, Page A186. 2 This is the 16th annual edition of this study, which began in 1994 with the Call Report data; four years later the CRA data were included as part of the report. 3 The Call Reports, officially known as the Consolidated Reports of Condition and Income, are quarterly reports filed by financial institutions with their appropriate depository regulators. Call Reports provide detailed information on the current status of a financial institution. The CRA data are designed to encourage depository institutions to meet the credit needs of the local communities from which they obtain deposited funds. The CRA data are important for understanding small business lending activities by lending institutions and bank holding companies (BHCs) in a given state. 1 Small Business and Micro Business Lending in the United States, 2008-2009 CRA database. Analysis in this study covers data from June 2008 through June 2009 for Call Reports and the calendar year of 2008 for CRA reports. Part Two provides lists of the top small and micro business lenders in the states, using both the Call Report and CRA data. For the reader’s convenience, tables listing nationwide multi-billion- dollar lending institutions are presented before the state tables. The placement is not a reflection of the lending institutions’ relative importance in small business lending. The Call Report and CRA databases are important because they are the only publicly available sources of information on the small business lending activities of individual lending institutions. It should be noted that the databases are limited as indicators of both supply and demand in these small business lending markets. The data reflect only the supply of loans and only those loans provided by banks and savings and loan association. That is, they tell only part of the small business lending story. Small firms certainly have access to other sources of credit, such as their suppliers, finance companies, family and friends. Accessing the Study The current and previous editions of Advocacy’s lending studies are available on Advocacy’s website at www.sba.gov/advo/research/lending.html. Paper and microfiche copies are also available for purchase from the National Technical Information Service, telephone (703) 487- 4650. Suggestions Send written comments or suggestions to the Office of Advocacy, U.S. Small Business Administration, Mail Code 3112, 409 Third St., S.W., Washington, D.C. 20416, or by fax to (202) 205-6928. Technical questions may be addressed to Dr. George Haynes or Ms. Victoria Williams, at (202) 205-6530 or by email: [email protected] or [email protected]. 2 Small Business and Micro Business Lending in the United States, 2008-2009 Part One: Developments in Small and Micro Business Lending I. Findings from the June 2008–June 2009 Call Reports A. Small Business Loans Outstanding from All Reporting Lending Institutions U.S. lending institutions’ patterns of lending to businesses showed declines in both the number and value of loans for all loan size categories in 2008-2009.