While access to credit continues to be a challenge for some small businesses, those that are lending report that commercial and industrial loans under $100,000 are their growth leaders.
According to the SBA’s latest Quarterly Lending Bulletin, micro loans accounted for the most growth in the fourth quarter of 2011, the most current data on record.
Small business loans totaled $597.8 billion during that period, the agency said.
The SBA bulletin, which tracked its data along with FDIC Call Reports, showed that the rate of decline in the dollar value of small business loans outstanding under $1 million was much slower, at negative 0.3% in the fourth quarter of FY 2011, compared with a decline of 1.2% in the previous quarter.
The value of small business C&I loans increased for the first time in seven quarters, the data showed. On net, bankers reported eased pricing terms on the loans as well as increased demand from small firms.
Depository lending institutions with consolidated assets over $50 billion continued to dominate the small lending market, according to the SBA.
“Borrowing remained challenging for small businesses in fourth quarter 2011, even as the pace of economic activity increased and financial conditions overall were supportive of growth,” wrote SBA economist Victoria Williams, in the bulletin. “Economic indicators such as gross domestic product and total business lending continued on a slow upward trend. The recovery of small firms has been slow because of their inability to access credit markets.”