Advance Notice: Small Business Lending in the United States 2010-2011

July 19, 2012

Tomorrow, the SBA Office of Advocacy will release a new research study, “Small Business Lending in the United States, 2010-2011.”

You will not be surprised to learn that overall lending to and borrowing by small businesses was weaker in 2011 than the previous year.

Small Business Lending in the United States, 2010-2011

By Victoria Williams, U.S. Small Business Administration, Office of Advocacy, Office of Economic Research, 2011.

The availability of credit is paramount to small business health, growth, and survival. Annually, the Office of Advocacy prepares the study of Small Business Lending in the United States that examines the lending environment of depository lending institutions. This report is intended to inform prospective lenders, policymakers, business owners, and lending institutions of developments in the small business loan markets.

The study relies on two types of data reported by depository institutions to their regulatory agencies and made available for analysis—The Call Report data and the Community Reinvestment Act (CRA) Reports. The lenders are ranked on their overall small business lending nationally and on a state-by-state basis.

The first section of Part One looks at the changes in the Call Report data; the second reviews developments based on the CRA database. Listings of the top small and micro business lenders in the 50 states, the District of Columbia, and some U.S. territories are found in Part Two of the report.

All small business lenders filing reports in the U.S. economy are examined. The data does not allow differentiation between SBA loans and all small business loans. This report includes cooperative banks in addition to savings banks, savings and loan associations, and commercial banks.

Overall Findings

Overall lending and borrowing by financial depository institutions and small businesses was weaker in 2011 than in the previous year, as borrowers and lenders continued to postpone new borrowing and lending in reaction to an uncertain economy.

Highlights

• While business lending in amounts of more than $1 million turned upward, small business lending under $1 million remained restrained. Small busi-ness loans outstanding in June 2011 were valued at $606.9 billion, down 6.9 percent from $652.2 billion the previous year. The dollar volume of borrowing by large corporations in loan sizes over $1 million increased by 5.8 percent in 2011, compared with an 8.9 percent drop in 2010.• Borrowing declined for both types of small business loans—commercial real estate (CRE) and commercial and industrial (C&I) loans under $1 million—but at a slower rate for CRE. The value of the smallest C&I business loans or micro loans (less than $100,000) declined by 12.7 percent, from $137.2 billion in June 2010 to $119.8 billion in June 2011. CRE and C&I micro loans combined were valued at $139.5 billion in 2011.• Megabanks—those with $50 billion or more in assets—accounted for 38 percent of small busi-ness loans outstanding and for 51 percent of the total decline in small business loans.• The number of multi-billion-dollar lenders with assets over $10 billion was down from 94 in June 2010 to 92 in June 2011. Their share of total assets, however, grew from 76.7 percent to 77.3 percent during the same period.• The CRA data on small business lending mir-ror the results in the Call Report data. In 2010, 774 CRA-reporting institutions extended 4.3 million loans of less than $1 million, for a total of $178.8 billion in small business loans; this compares with a 2009 total of 6.2 million loans valued at $205.7 billion made by 799 depository lending institutions.

Scope and Methodology

The study uses two types of data to analyze the lending environment of depository financial institutions for the years 2010-2011. The Call Reports include information on the amount and number of outstanding loans as of June 2011, and the Community Reinvestment Act (CRA) data cover loans made in 2010. The reported data are available only by the size of the loan, not by the size of the business; thus, small business loans are defined as business loans under $1 million; macro business loans are defined as loans between $100,000 and $1 million; and micro business loans are defined as loans under $100,000. Several variables from the Call Reports are used to analyze developments in the lending activities of these institutions. 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 they are for the Call Reports.

Depository lenders with total domestic assets of more than $10 billion are ranked and reported separately, on the assumption that they serve a national market. Lenders are ranked by state based on the designated headquarters of the reporting lending institution. Two ranking methods are used depending upon the availability of data. For lending institutions for which 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.

For the analysis of state lending based on CRA data, lenders were listed in order of the dollar amount of small business loans made in each state in 2010 in descending order, so large institutions appear at the top. Simple rankings were used for multi-billion-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 by email at advocacy@sba.gov or by phone at (202) 205-6533.

 

 


Sequestration and Potential Effects On Small Business Defense Contracting

July 5, 2012

When: Thursday, September 6, 1 p.m. – 2:30 p.m.

By Defense Daily with Federal Allies Institute, U.S. Department of Defense & Professional Services Council.
Register Now

Small defense contractors are bracing for potential sequestration budget cuts that could start next January and slash $500 billion in planned defense spending over the next decade. The reductions, which total $1.2 trillion and include non-defense spending, come as the result of the Budget Control Act of 2011–which says if a super committee of lawmakers failed to craft a deficit-cutting plan (as it did), the across-the-board “sequestration” reductions would start in 2013. The law calls for the cuts to trim the same percentage from every applicable defense program, project, and activity, though the Obama administration has exempted some parts of the Pentagon budget, including military-personnel funding.

Democrats and Republicans in Congress are debating ways to prevent the politically unpopular sequestration reductions, but the two sides remain at odds. The uncertainty over the pending cuts is already impacting companies, both large and small, that do business with the Defense Department. It’s unclear precisely how the Budget Control Act will be implemented and what its exact consequences will be, but the Defense Daily webinar on sequestration and its potential effects on small-business defense contracting will shed some light on this tricky subject. Find out more!

What can companies do now, and closer to the November elections, to prepare themselves for possible cuts?

What is changing in acquisition policy? How are size standards affecting small contractors?

How can businesses manage new contracts?

How is the Pentagon’s Office of Small Business Programs dealing with possible budget cuts? What approach is it taking?

How should smaller firms be approaching mergers and acquisitions? Do businesses need to think about consolidating their supply chain?

Defense Daily will host a webinar September 6, 2012, featuring a panel that includes the head of the Pentagon’s Office of Small Business Programs and leading experts in federal contracting. Defense Daily invites you to join a timely discussion about how businesses can prepare for looming spending reductions in the federal government.

Confirmed Panelists include:

Gary Shumaker, Federal Allies Institute Board Member in Charge of Government Contracting Certification

Gary Shumaker is an elected board member in charge of government contracting certification and strategic consultant for the Federal Allies Institute, U.S. trade association for business and federal acquisition best practices. Shumaker is also the founder and a senior consultant for Gary E. Shumaker, Inc., a business consultancy that specializes in helping small businesses overcome the handicaps of their size and lack of experience. He publishes The Shumaker Report, a newsletter that concentrates in subjects of interest to small federal contractors. He is President of C2 Solutions Group, a service-disabled veteran-owned small federal contractor.

Farooq Mitha, Special Assistant to the Director of the Department of Defense Office of Small Business Programs

Mitha supports DoD’s small business industrial base through the development of acquisition policy, the implementation of programs and the alignment of small business capabilities with DoD’s urgent needs. These efforts aim to maximize the contribution of small businesses in defense acquisitions and reduce barriers to entry for businesses seeking to contract with the federal government. Farooq is also a principal member of the DoD-Veterans Affairs Taskforce on Veteran’s Employment and is on the steering committee of the White House Business Council.

Alan Chvotkin, Professional Services Council Executive Vice President and Council

Alan Chvotkin is the Executive Vice President and Counsel at the Professional Services Council, the principal national trade association of the government professional and technical services industry. Chvotkin is one of the most knowledgeable and respected experts on federal acquisition policy, legislation, and regulation. At PSC, Chvotkin is responsible for the association’s legislative and regulatory policy. Prior to joining PSC, Chvotkin was a vice president of AT&T Government Services and director and counsel at Sundstrand Corporation. Earlier in his career he spent 13 years on Capitol Hill. He has a law degree from The American University’s Washington College of Law, a master’s in public administration and a bachelor’s in political science.

How does the Webinar work?

It’s easy and convenient! You just need RealPlayer or Windows Media Player installed on your computer. If you do not have either, please follow the instructions below to download and install them. Or if you prefer, a phone for the audio and an Internet connection to let you watch the slides and other information on the Web will suffice. No other downloads or special hardware – a dial-up connection will work fine.

  • One (1) set of materials (you may make copies for all of the persons you invited to listen to the program);
  • One (1) toll-free connection to the seminar (if you select the audio connection), and
  • One (1) Internet connection to the seminar.
  • Use speakers on your computer or speakerphone on your telephone and invite your entire staff to attend for FREE!

What equipment do I need?

For the audio connection:

  • A computer with RealPlayer or Windows Media Player installed. When you log into the Virtual Seminar, your computer will be taken through a brief configuration check and will let you know if you’re missing any software.
  • If you do not have RealPlayer or Windows, a touch-tone telephone will work also. It works best to use a speakerphone so that others can listen too.

For the Internet connection:

  • PC: 166Mhz Pentium-based PC or better
  • Operating system: Windows 95, 98, NT, 2000, XP
  • Browser: For optimal viewing experience, we recommend using Internet Explorer 6.0 or higher. However, any version of IE 4.0 or higher will work. For Netscape, only versions 4.x are supported at this time.
  • Internet connection: 28.8 or faster connection
  • Display set at 1024 x 768 or 800 x 600

Player Downloads

Questions?

If you are having any technical difficulties or need assistance meeting these requirements, please contact our Technical Support Center at 866-709-8255 or click here. For content questions regarding this Webinar, contact Jennifer Green-Holmes at jgreenholmes@accessintel.com


Federal Allies News July 2012

July 3, 2012

Federal Allies Institute’s Summer Plans

Federal Allies is a relatively new national small business and federal contractors association of humble beginnings at Fort Myer, Virginia in 2008.  With hard work and perseverance our small business network now deals with most agencies of the federal government and military.

Within this arena for our business members we train, make agency introductions, collaborate and save money on back office operations.

And in collaboration with federal agencies and on Capitol Hill, we help meet federal small business goals, strive for regulatory flexibility, and when we need to, we convene Congressional meetings of importance to entrepreneurs.

Federal Allies is an ideal, inexpensive if not at times free platform for you to establish new business ties and to learn how to succeed in the federal contracting community.

Plus we have formal alliances with U.S. Small Business Administration and other organizations.

And finally, we are an entrepreneurs’ organization that seeks more members and business and agency leaders for our Board of Directors. Specifically, we seek representation in every state.

This summer Federal Allies reinstitutes a series of networking events within Metropolitan Washington DC to convene federal contractors of all levels of business maturity and from all parts of the country.

While many are consumed with summer reading lists and planning family vacations, a significant portion are also focused on the dawn of Sequestration, Simpson-Bowles, and Veterans Entrepreneurial Transition Act and the prescient balancing act of commercial and federal business.

With 40% of what our federal government spends actually borrowed, the U.S. is on a wrong economic course and the need to renew institutional arrangements is at hand.  Federal Allies Institute was born practically on day one of the world’s worst economic decline in any of our lifetimes, so the well-being of this nation and the present state of the economy are not lost on our American business owner members.

We appreciate our new sponsors American Airlines, Dell and zipcar that help make the lives of our members more affordable, more capable and environmentally sound.

Federal Allies Institute this fall will offer seminars on Proposals 101 and Business Development.  A big topic for small business is how to weather the upcoming uncertainty in federal contracting.  For those of you that cannot make it to Washington this Summer, I invite you to tune in on September 6, 1:00 pm to 2:30 pm EDT for a webinar presented by Defense Daily featuring Federal Allies Institute’s Gary Shumaker.  For more information, see www.FederalAllies.org and  www.DefenseDaily.com.

David T. Boddie

Executive Director, Federal Allies Institute

Article courtesy of Federal Allies News published by Management Concepts Press.

Vol. 1 No. 4