FDIC Says Small Business Lending Falls By 9%

December 30, 2024

Delaney Sexton
Contributing Editor

FDIC Says Small Business Lending Falls By 9%

The FDIC’s CRA December 2024 report reveals that small business loans of less than $100,000 decreased by almost 9%. Small rural farm loans experienced a similar decline. The number of loan originations fell by 5.6%, while the dollar amount dropped by 5.2%. In total, 8.4 million small business loans were made, amounting to $261.7 billion.

The Federal Reserve attributes these declines partially to rising interest rates and tightened lending standards.

According to the data, 94.9% of small business loans and 80.2% of small farm loans originated in 2023 were for amounts under $100,000. In terms of dollar value, 43% of small business loan dollars and 28.3% of small farm dollars were allocated to loans less than $100,000.

More than half of the small business loan originations were for businesses with revenues of $1 million or less, and these businesses received over a third of the total dollar amount of small business loans. For small farm loans, 58.1% of originations went to farms with revenues of $1 million or less. These farms also received 62% of the total dollar amount of small farm loans.

Source:
FDIC 2023 CRA Report