Small and Micro Business Lending for 2004-2005

Office of Advocacy, U.S. Small Business Administration

The Office of Advocacy prepares an annual study 

of institutional lending to small firms. The study 

provides a review of lending activities based on two 

types of data that lenders report to their regulating 

agencies—the Consolidated Reports of Condition 

and Income (call reports) for June 2005 and the 

Community Reinvestment Act (CRA) reports for 

2004. Because data are available only by the 

size of the loan, small business loans are defined 

as business loans under $1 million, and micro business loans are those under $100,000. The report 

includes a discussion of developments in the small 

and micro business lending activities of institutional 

lenders. The report examines small business lending 

in the economy by all lenders in the United States. 

No attempt has been made to distinguish SBA-guaranteed lenders in the analysis. Lenders are ranked 

based on their overall lending, not lending under 

SBA programs.

Part one reviews developments apparent in the 

call report data from June 2004 through June 2005 

and the CRA database for the year 2004. Part two 

provides directories of the top small and micro 

business lenders in the 50 states, the District of 

Columbia, and some U.S. territories. For the reader’s 

convenience, national tables for multibillion-dollar 

banks and bank holding companies are presented 

before state tables for all banks, not because bank 

holding companies are more important in small business lending, but because the tables are shorter. 

This year’s edition has been expanded to include 

savings banks and savings and loans associations, 

in addition to commercial banks. Geographic coverage has been expanded to include American Samoa, 

Guam, Puerto Rico, and the U.S. Virgin Islands.

Overall Findings

Amid a slowing economy, the rate of small business 

lending growth in the United States slowed down in 

2005 relative to the previous year. Small business 

credit cards remained the most dynamic market; 

the number of small business loans outstanding (for 

loans under $100,000) grew by 25 percent, from 15.2 

million in June 2004 to 19.0 million in June 2005.

Highlights

• Total small business loans outstanding for the 

8,799 reporting depository institutions in the U.S. 

and territories were valued at $601 billion for 21.0 

million loans in June 2005. This compares with a 

total of $577.1 billion in value and 17.1 million in 

number in the previous year. There were 19.0 million 

micro business loans outstanding in June 2005, valued at $138.4 billion; in June 2004 there were 15.2 

million micro business loans outstanding valued at 

$135.9 billion.

• The rate of growth in small business borrowing 

slowed from the previous year; the value of all small 

business loans outstanding increased 4.1 percent; the 

largest increase came from the larger small business 

loans ($100,000 to $1 million). The smallest loans 

(under $100,000) rose a meager 1.9 percent in spite 

of a huge increase in the number of loans.

• The number of small business loans, however, 

resumed their large increases, growing by 22.6 percent between June 2004 and June 2005. The increase 

was concentrated in the smallest loans, the number 

of which rose from 15.2 million to 19 million in 

June 2005. This constituted an increase of 25 percent 

as compared with a decrease of 11 percent between 

June 2003 and 2004. (The one-year decline was in 

large part an accounting phenomenon.)

• Multibillion-dollar lending institutions continued to grow through mergers and acquisitions. Many 

large lending institutions (most of them bank holding 

companies—BHCs), saw their total assets increase 

by 20 percent or more. While the number of multibillion dollar lending institutions with total domestic 

December 2006 No. 288

The opinions and recommendations of the authors of this study do not necessarily reflect official policies of the U.S. Small Business 

Administration or other agencies of the U.S. government.
assets of more than $10 billion declined from 104 in 

June 2004 to 101 in June 2005, their share of total 

assets grew to 73.8 percent (as compared with 72.8 

percent the year before).

• The largest lenders continued to focus on the 

market for loans under $100,000, especially the business credit card market. This market accounted for 

70 percent of the total number of micro business 

loans in June 2005. The largest lenders’ share of the 

market for loans between $100,000 and $1 million 

remained relatively unchanged, in both amount and 

number.

• The CRA reports confirm large lending institutions’ lending growth in 2004 and their continued 

promotion of small business credit cards. In 2004, 

the 1,484 CRA-reporting institutions extended 8.1 

million loans that were less than $1 million, for a 

total of $288 billion in small business loans. This 

compares with 7.8 million loans valued at $271 billion in 2003 extended by 1,562 entities. For micro 

business loans, 7.5 million micro business loans 

valued at $95 billion were made in 2004, compared 

with 7.3 million loans valued at $87 billion in 2003.

Scope and Methodology

This study provides a review of lending activities for 

depository institutions in 2004-2005 based on two 

types of data reported by lending institutions to their 

regulating agencies—the call reports for June 2005 

(for the amount and number of outstanding loans) 

and the CRA reports for 2004 (for loans made during the year). Since the reported data are available 

only by the size of the loan (not by the size of the 

business), small business loans are defined as business loans under $1 million; micro business loans 

are defined as loans under $100,000. Developments 

in lending activities over time by lending institutions 

are analyzed based on the call report statistics for 

several variables. However, because of the changing 

number of lending institutions required to file CRA 

reports, year-to-year changes in these institutions’ 

activities are more difficult to interpret than for the 

call reports.

Large lending institutions (with total domestic 

assets of more than $10 billion) are ranked and 

reported separately, under the presumption that they 

serve a national market. Rankings by state are made 

for all reporting lenders on the basis of the designated headquarters state of the reporting lending institutions (see Table 5 for the number of institutions in 

each state). Two ranking methods are used, depending upon the availability of data.

For lending institutions where information on total 

assets and total business loans are available (those 

filing call reports), four criteria are used as the basis 

for a lender’s performance ranking. A summary rank 

for four decile ranks is computed for each institution 

in the state rankings. A decile ranking is first used 

for individual criteria; decile rankings range from 1 

to 10. Lending institutions in the top 10 percent of 

all lenders in the state receive the maximum score of 

10; banks in the lowest 10 percent receive a score of 

1. Lenders that do not lend to small businesses (loans 

under $1 million) receive a 0. Four top scores will 

sum to 40. To make the top score total 100 rather 

than 40, each score is multiplied by 2.5.

For state lending using the CRA data, lenders 

were listed in order of the dollar amount of small 

business loans made in each state in 2003. Large 

institutions therefore appear at the top. Simple rankings were used for multibillon dollar lending institutions because only a small number of lenders are 

involved.

This report was peer reviewed consistent with 

Advocacy’s data quality guidelines. More information on this process can be obtained by contacting 

the director of economic research at advocacy@sba.

gov or (202) 205-6533.

Ordering Information

The full text of this report and summaries of other 

studies performed under contract with the U.S. Small 

Business Administration’s Office of Advocacy are 

available on the Internet at www.sba.gov/advo/research. 

Copies are available for purchase from:

National Technical Information Service

5285 Port Royal Road

Springfield, VA 22161

(800) 553-6847 or (703) 605-6000

www.ntis.gov

Order number: PB2007-103423

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