Data on small business, small farm, and community development lending during 2023 was made public Monday by the three federal banking agencies, showing a decrease in lending activity driven by higher interest rates and tighter credit.
The release is required by federal anti-redlining laws (Community Reinvestment Act (CRA)).
According to the banking agencies, key points in the data — collected under the auspices of the Federal Financial Institutions Examination Council (FFIEC), the umbrella group for federal financial regulators, including the banking regulators — included:
- CRA reporters (banks required to file CRA reports) account for about 76.9% of small business loans outstanding (by dollars) and about 35.2% of small farm loans outstanding (by dollars) at depository institutions.
- Larger institutions account for most of the reported lending. During 2023, financial institutions with assets of $1.503 billion or more (as of Dec. 31, 2022) accounted for 99.3% (by dollars) of reported small business loan originations.
- The very largest institutions – 153 reporters with assets of $10 billion or more – accounted for about 73.8% of CRA reported small business loans originated in 2023 by dollars.
- About 8.4 million small business loans (originations and purchases) totaling nearly $261.7 billion were reported in 2023.
- The total number of loans (including purchases) decreased by 5.2%, while the number of loans originated decreased by 5.1% relative to 2022. The dollar amount of small business loans originated decreased by 8.9%.
- Regarding small farm loans, the number of originations decreased by about 5.6% and the dollar amount decreased by 5.2% in 2023 from 2022.
- The decrease in lending is likely due, at least in part, to rising interest rates and tighter lending standards, according to the agencies.
The data include small business and small farm lending for all of the metropolitan statistical areas and non-metropolitan counties in the United States and its territories, the agencies said
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