Myth: Banks are holding back the economy because they aren’t lending to small businesses.

October 11, 2012 • The Partnership for a Secure Financial Future

 

 

 

 

 

Myth: Banks are holding back the economy because they aren't lending to small businesses.

Fact: In 2012, banks have increased loans to small businesses by more than $11 billion.

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Last year, 13 major banks made a commitment, along with the Small Business Administration, to increase lending for small businesses by $20 billion by the end of 2014. This year alone, bank lending to small businesses has increased by (net) $11 billion - more than half of the industry's three-year goal.

Banks are meeting financing needs - not holding back the economy. According to the NFIB, 93 percent of all small business owners reported that all their credit needs were met or that they were not interested in borrowing. Additionally, a survey by PayNet shows that lending rose 3 percent in August - the second straight monthly increase which is a part of the longer 3-year trend of continued improvement.

Wells Fargo exemplifies a major bank working to meet small business needs. The bank has extended $7.4 billion in net new loan commitments to small businesses across the United States (primarily, those with annual revenues of less than $20 million) in the first half of 2012 - about a 32 percent increase from the same period a year ago.

It is no secret what propels the U.S. toward economic recovery. For the last 20 years, small businesses have created two-of-three net new jobs in the country, and today more than half of working Americans own a small business or work for one. Banks are a crucial partner to businesses and are stepping up lending so small businesses can do what they do best - grow.