scholarly journals Why Small Business Lending Isn’t What It Used to Be

2013 ◽  
pp. 1-4 ◽  
Author(s):  
Ann Marie Wiersch ◽  
Scott Shane
Keyword(s):  
Small Business ◽  
Great Recession ◽  
Small Businesses ◽  
Bank Lending ◽  
Single Factor ◽  
Multiple Sources ◽  
Small Business Lending ◽  
The Great Recession ◽  
The Many ◽  
Take All

Since the Great Recession, bank lending to small businesses has fallen significantly, and policymakers have become concerned that these businesses are not getting the credit they need. Many reasons have been suggested for the decline. Our analysis shows that it has multiple sources, which means that trying to address any single factor may be ineffective or make matters worse. Any intervention should take all of the many causes of the decline in small business lending into consideration.

Small Business Lending

2019 ◽  
pp. 430-469
Author(s):  
Allen N. Berger ◽  
Lamont K. Black
Keyword(s):  
Small Business ◽  
Small Businesses ◽  
Technological Progress ◽  
Global Financial Crisis ◽  
Bank Lending ◽  
Relationship Lending ◽  
Small Business Lending ◽  
Credit Supply ◽  
The Global Financial Crisis ◽  
Lending Technologies

Small businesses are engines of economic growth that are fueled in large part by bank lending. We examine the roles of technology and regulation in the supply of small business credit. Technological changes increase small business credit supply through the adoption of new hard-information-based lending technologies, such as FinTech lending, as well as by improving existing lending technologies. Technological progress has more modest effects on the processing and transmission of soft information used in relationship lending. Regulatory changes, such as pre-crisis deregulation and post-crisis reregulation, directly affect bank small business lending. The combination of technological progress and geographical deregulation also has resulted in more bank consolidation and competition, both of which have mixed effects on small business credit supply. Lastly, we cover the challenges and mitigating factors in explaining the dramatic drop in small business credit availability during the Global Financial Crisis and the very slow growth during the subsequent recovery.

scholarly journals Do Credit Market Shocks Affect the Real Economy? Quasi-experimental Evidence from the Great Recession and “Normal” Economic Times

2020 ◽  
Vol 12 (1) ◽  
pp. 200-225 ◽  
Author(s):  
Michael Greenstone ◽  
Alexandre Mas ◽  
Hoai-Luu Nguyen
Keyword(s):  
Small Business ◽  
Great Recession ◽  
Bank Lending ◽  
County Level ◽  
Real Economy ◽  
The Great Recession ◽  
Market Shares ◽  
Business Loan ◽  
Quasi Experimental ◽  
Market Shocks

Using comprehensive data on bank lending and establishment-level outcomes from 1997–2010, this paper finds that small business lending is an unimportant determinant of small business and overall economic activity. A shift-share style research design is implemented to predict county-level lending shocks using variation in preexisting bank market shares and bank supply shifts. Counties with negative predicted lending shocks experienced declines in small business loan originations, indicating that it is costly to switch lenders. However, small business loan originations have an economically insignificant and generally statistically insignificant impact on both small firm and overall employment during the Great Recession and normal times. (JEL E32, E44, E52, G21, G32, L25)

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