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Small business lending and the Great Recession

The Consumer Financial Protection Bureau released a data point on the evolution of small business lending before, during, and following the Great Recession. Small businesses are an important engine for growth within the American economy, and this report shows how their access to credit from traditional sources has declined during the Great Recession and has recovered somewhat and unevenly since the end of the Great Recession. 

This report details the evolution of small business lending across geography and sources of lending. It utilizes data from the Community Reinvestment Act (CRA) on small business lending at the county level from 2004-2017 and Census data on the number of employer and non-employer firms. 

Some of the primary findings from the report are:

  • Following the Great Recession, small business lending has increased, but lenders in the median county still made only one-half the number of small business loans per business in 2017 as they had made in 2004. 
  • After the Great Recession, there was an increase in small business lending but there has been substantial variation by county and state, unlike the uniform decrease in such lending during the Great Recession.
  • Following the Great Recession, there were regional differences in increases in small business lending - states on the East Coast and in the South recovered at a faster rate than states in the Great Plains and West.
  • From before the Great Recession through 2017, the total number of thrifts, community banks, and large banks engaged in small business lending have declined.  However, the number of credit unions offering small business lending products has increased since the beginning of the Great Recession. 

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