December 27, 2021
Main Street Monday – Small Business Loan Dollars Increased Almost 80% in 2020
The Federal Deposit Insurance Corporation released a report analyzing the 2020 Community Reinvestment Act data compiled from three federal banking agency members regarding small business loan origination. With support from the Paycheck Protection Program, small business lending skyrocketed during 2020 in support of local small businesses and farms.
Here are the statistics:
• In 2020, 8.4 million small business loans worth almost $461.8 billion were reported.
• The total number of loans increased by nearly 10% (9.7%) from 2019 to 2020, and the number of loans originated increased by 10.9%.
• From 2019 to 2020, the dollar amount of small business loans originated increased by 78.7%.
• The number of small farm loan originations increased by 1.7%, and the dollar amount increased by about 8% in 2020.
• 98.3% of the total dollar amount of reported small business loan originations in 2020 were from banks and thrifts with assets of $1.305 billion or more. The largest institutions, 139 reporters with assets of $10 billion or more, accounted for 71% of CRA (Community Reinvestment Act) reported small business loan originations in 2020.
• 87.5% of small business loans and 78.1% of small farm loans originated in 2020 were for amounts less than $100,000.
• 32.1% of small business loan dollars and 28% of small farm loan dollars were from loans of less than $100,000.
• About 40.7% of the number of reported small business loan originations and about 25.5% of the dollar amount of small business loans went to farms with revenues of $1 million or less. Of small farm loan originations, 56.3% of the number of loans and 66.3% of the dollar amount of loans were approved for farms with revenues of $1 million or less.
• Of the 687 institutions that reported in 2020, 621 institutions reported community development lending activity.
• Overall, lenders reported more than $169 billion in community development loans in 2020, a 52% increase from the reported amount in 2019.