Small Business Lending Survey 61

APPENDIX B. 

Extrapolated Outstanding C&I 

Lending to Small Businesses

B.1 Extrapolated C&I Lending to Small 

Businesses Originated at Amounts 

Greater Than $1 Million, by Banks 

with Assets of $1 Billion to Less 

Than $10 Billion

In the survey, banks with $1 billion in assets or 

more were asked to report their outstanding C&I 

loan dollars broken down by loan size and business 

gross annual revenue (GAR). This was used to 

extrapolate the lower bound amount of C&I lending 

with origination values of over $1 million that went 

to small businesses. First, total outstanding C&I 

lending with origination amounts of greater than 

$1 million was taken from the Call Report. This 

was then adjusted by the ratio of outstanding C&I 

lending with origination amounts greater than $1 

million that went to businesses with less than $1 

million in gross annual revenue, to total outstanding 

C&I lending with origination amounts greater than 

$1 million, which was calculated from the answers 

collected by the survey. For banks that use GAR 

limits to define small businesses, almost all consider 

businesses with less than $1 million in gross annual 

revenue to be small businesses (see Section 2.1). 

Due to sample size constraints, these calculations 

could only be done for banks with $1 billion to less 

than $10 billion in assets. A conservative estimate 

of the calculated ratio was used, specifically the 

lower bound of the 80 percent confidence interval 

estimated in the survey. The results are shown in 

Table B.1. Assuming that all businesses with less 

than $1 million in gross annual revenue are small 

businesses, these calculations suggest that, in Q4 

2015, there was at least $19.1 billion in outstanding 

small business C&I loan dollars that was not 

accounted for in the Call Report proxy due to being 

over $1 million at the time of origination.

Table B.1: Extrapolated Lower Bound, C&I Lending to Small Businesses Originated at Amounts 

Greater Than $1 Million

(Banks with Assets of $1 Billion to Less Than $10 Billion Only)

Bank Asset Size

Outstanding C&I Lending 

with Origination Amounts 

Greater than $1M ($ 

Billions)

Ratio of Outstanding C&I Lending with 

Origination Amounts Greater than $1M 

That Went to Businesses with Less Than 

$1M GAR, to Total C&I Lending with 

Origination Amounts Greater Than $1M 

Extrapolated Outstanding 

C&I Lending with Origination 

Amounts Greater Than $1M to 

Small Businesses ($ Billions)

Mean Ratio Lower Bound Ratio

$1B to Less Than $10B $132.5B 0.212 0.143

Total: $19.1B

Source: Call Report SBLS
62 FEDERAL DEPOSIT INSURANCE CORPORATION

Appendix B. Extrapolated Outstanding C&I Lending to Small Business

B.2 Extrapolated C&I Lending to Small 

Businesses Originated at Amounts 

Greater Than $1 Million, by Banks 

with Assets Below $1 Billion 

For banks with assets below $1 billion, the 

extrapolated lower bound of C&I lending 

originated at amounts greater than $1 million 

that were made to small businesses is based on the 

share of these banks that described themselves 

as making “largely all” of their loans to small 

businesses. As shown in Figure 2.5, 86.4 percent of 

banks with under $250 million in assets and 76.5 

percent of banks with $250 million to less than 

$1 billion in assets made largely all their loans to 

small businesses. Banks were then rank-ordered 

within the two asset size groups by Call Report 

C&I lending, and for each bank in the bottom 86.4 

or 76.5 percent, respectively, Call Report small 

business proxy C&I lending was compared to total 

C&I lending. For all such banks where proxy C&I 

lending was less than half of total C&I lending, the 

difference between half of total C&I lending and 

proxy amount of lending was summed together, as 

a conservative extrapolation of the understatement 

for the two asset size groups of banks. In many 

cases, no extra C&I lending was counted as small 

business lending, since banks’ proxy small business 

lending was already over 50 percent of their total 

C&I portfolio.

This highly conservative extrapolation assumes 

two very restrictive constraints (a) the banks which 

make largely all their loans to small businesses are 

the banks in each category which do the least C&I 

lending, and (b) banks which make largely all their 

loans to small businesses make only 50 percent of 

their loans to small businesses (unless they directly 

report a higher proportion in the small business 

C&I proxy). By this estimate, small business 

lending is underestimated by at least $60.2 million 

for banks with less than $250 million in assets and 

by at least $32.3 million for banks with between 

$250 million and $1 billion in assets.

75 Dollar amounts at origination is the dollar amount extended by the loan at the time of origination, while outstanding loan balances, which is what is collected by the Call Report, instead reflects the remaining balance still owed on a loan. While these two 

measures capture different concepts, at a given moment in time for the industry the total dollar amounts in aggregate are similar 

as loan dollars that are paid off by borrowers are likely extended again as new lending.

It should be noted that much larger understatements 

are generated for these-sized banks if instead the 

simple method of counting their entire C&I portfolio 

as small business lending is used, as discussed in 

Section 2.3. Applying the simple method to the 

bottom 86 percent of banks with assets of less than 

$250 million and the bottom 76 percent of banks 

with assets of between $250 million and $1 billion, 

when ranked by their total C&I lending, instead 

yields for Q4 2015 an additional $16.9 billion in C&I 

lending to small businesses in loans with origination 

amounts above $1 million. 

B.3 Extrapolated C&I Lending 

Collateralized by 1-4 Family 

Residences

The survey asked banks to report their total 

origination and renewal lending for C&I purposes 

as well as origination and renewal lending for C&I 

purposes that was primarily secured by 1-4 family 

residential properties (residentially-secured C&I). In 

order to extrapolate the lower bound total amount 

of outstanding residentially-secured C&I, the total 

amount of outstanding C&I lending in the Call 

Report was adjusted by the ratio of residentiallysecured C&I originations to non-residentiallysecured C&I originations calculated from the 

answers collected by the survey. This was done, first, 

because C&I lending collected by the Call Report by 

definition excludes any residentially-secured lending 

for C&I purposes (see the box in Section 2), and 

second, because the Call Report collects information 

on outstanding loan dollars, while the survey 

questions asked about origination dollars.75

A conservative estimate of the ratio of residentiallysecured to non-residentially-secured C&I lending 

was used in the extrapolation, specifically the lower 

bound of the 80 percent confidence interval estimated 

in the survey. These calculations were done separately 

for banks with less than $250 million in assets, banks 

with $250 million to $1 billion in assets, banks with 

$1 to $10 billion in assets, and banks with over $10 
 Small Business Lending Survey 63

Appendix B. Extrapolated Outstanding C&I Lending to Small Business

billion in assets. The results are shown in Table B.2. 

Assuming that all residentially-secured C&I loans are 

made to small businesses, these calculations suggest 

that, in Q4 2015, there was at least $18.3 billion in 

outstanding small business C&I lending that was not 

accounted for in the Call Report proxy due to being 

residentially-secured.

Table B.2: Extrapolated Lower Bound, C&I Lending Collateralized by 1-4 Family Residences

Bank Asset Size Outstanding C&I Lending 

($ Billions)

Ratio of Residentially-secured C&I Origination 

to Non-residentially-secured C&I Originations Extrapolated Outstanding 

Residentially-secured C&I 

Lending ($ Billions) Mean Ratio Lower Bound Ratio

Less than $250M $31.5B 0.173 0.139 $4.4B

$250M to Less 

Than $1B $77.3B 0.103 0.084 $6.5B

$1B to Less Than 

$10B $188.5B 0.032 0.025 $4.8B

$10 Billion or 

More $1,297B 0.010 0.002 $2.7B

Source: Call Report SBLS Total: $18.3B