Only 43% of Small Banks Make SBA Loans Says Fed
Only 43% of Small Banks Make SBA Loans Says Fed
October 3, 2024
By Bob Coleman
Publisher & Founder
From the FDIC Small Business Lending Survey released yesterday.
Fewer than half of small banks participate in government-guarantee loan programs that target small business borrowers, while nearly all large banks do.
About 43 percent of small banks and 87 percent of large banks participate in at
least some government-guaranteed lending.
SBA programs are the most popular small business government-guaranteed program banks use, with 36 percent of small banks and 84 percent of large banks participating.
Bank participation in only a non-SBA guarantee program is comparatively rare (7 percent of small banks and 3 percent of large banks).
The majority of banks (62 percent) that made SBA 7(a) loans in 2021 made fewer than 10 such loans, and only 2 percent of banks made more than 200 7(a) loans (Figure 2.11). These results are consistent with the relatively small number of banks that cite government-guaranteed loans as their primary small business loan product.
Further, these results suggest that banks can use the SBA program to supplement their regular lending or as a mainstay product, and participation does not seem to be inherently limited to large banks due to economies of scale.
