Commercial banks are the most important suppliers of debt capital to small firms, supplying more than 80 percent of lending in the credit line market and more than 50 percent in other markets, such as commercial mortgages and vehicle, equipment, and other loans.
In June 2004, small business loans outstanding owed to commercial banks amounted to $522 billion, but small firms are not just receiving loans from smaller, relationship-driven banks. Very large banks with assets of at least $10 billion are making a significant percentage of small loans of less than $100,000.
| Shares of the Number and Amount of Small Business Loans by Banks and BHCs by Asset Size, June 2004 | ||||
| Bank/BHC Asset Size ($) | All Banks & BHCs | |||
| < 500M | 500M-10B | >10B | ||
| Number of Bank/BHCs | 5,706 | 645 | 72 | 6,423 |
| SBLs <$100K Share of Amount Share of Number |
31.1% 11.0% |
19.2% 21.5% |
49.7% 67.5% |
$125.3B 13.6M |
| SBLs $100K-<$1M Share of Amount Share of Number |
26.8% 27.2% |
28.2% 28.2% |
45.0% 44.6% |
$397.0B 1.7M |
| SBLs <$1M Share of Amount Share of Number |
27.8% 12.8% |
26.0% 22.3% |
46.2% 65.0% |
$522.3B 15.3M |
Abbreviations: BHC, Bank Holding Company; SBL, Small Business Loan
Sources: Federal Reserve Board, Survey of Small Business Finances; special tabulations of the June call reports (Consolidated Reports of Condition and Income for U.S. Banks) prepared for the Office of Advocacy by James Kolari, Texas A&M University.
Information courtesy of the Small Business Administration, Office of Advocacy.
