Despite recent reports from regulators of persistently tight credit standards, the nation’s four largest banks issued $45.2 billion to small businesses in 2011, representing an average increase of 27.5 percent from the previous year, according to annual figures released in recent days by the banks.
JPMorgan Chase, the largest institution by assets, led the way with $17 billion of credit through nearly 400,000 new loans and lines to small businesses with less than $20 million in annual sales, a 52 percent increase over 2010.
Citigroup reported $7.9 billion in loans to small business in 2011, 30 percent higher than 2010.
Bank of America originated $6.4 billion in small business loans and commitments, up about 20 percent in 2011.
Wells Fargo made $13.9 billion in new loan commitments to its small business customers in 2011, an 8 percent increase in new dollars lent from 2010.
The surge in small business loans from the top four U.S. banks somewhat conflicts with reports that regulatory oversight may still be stifling the access of credit to some small businesses – although those reports include smaller, less-capitalized community banks.
Just this month, Federal Reserve Governor Sarah Bloom Raskin said in a speech that small business owners still “appear to be facing unusual obstacles in obtaining credit.”
The most recent Fed survey of senior loan officers on bank lending practices fund that a “low fraction” of domestic banks were easing standards for smaller firms, those with annual sales of less than $50 million, she said.
However, the jump in lending reported by the top four banks is more in line with the most recent small business survey by the National Federation of Independent Businesses. It found that access to credit continues to rank at the bottom of concerns among owners, with only 4 percent reporting financing as their No. 1 business problem.
The NFIB said that 93 percent of owners surveyed in December reported that all their credit needs were met or that they were not interested in borrowing.
“While the ability of businesses to access credit is a function of many factors, it is my view that the examination and supervision of the lender should not hinder the ability of creditworthy businesses to access credit,” the Fed’s Raskin said in a speech earlier this month before the Maryland Bankers Association.. “To be clear, I do not think this is occurring in any significant way…”
