During the first half of the year, total outstanding SBA loans under $1 million continued to decline, the agency said Friday.
Loans outstanding to small businesses at the end of the second quarter totaled $607 billion, according to the SBA. The 0.4% rate of decline in the second quarter is the slowest since the downturn began in 2008, the agency reported.
“Economic recoveries in the past have been volatile; however, this recovery has been marked by more volatility and prolonged persistence while small business owners try to regain a foothold,” wrote Victoria Williams, an SBA economist in the agency’s Office of Advocacy’s Quarterly Lending Bulletin.
Financial market conditions in the first half of 2011 were to some extent supportive of economic growth as borrowing conditions eased further for both businesses and consumers, Williams said, adding demand for commercial and industrial loans by large and medium-size firms increased; however, small business lending remained suppressed.
“In a nutshell, the analysis shows that small business lending continues to have a difficult time emerging from the recession, which results in a much slower pace of economic recovery,” Williams said.
The SBA recently released a report highlighting how credit unions had stepped in to fill the lending voids left by banks over a 24-year period.