The Impact of the Small Business Lending Fund on Community Bank Lending to Small Businesses

摘要

Following the financial crisis, total outstanding loans to businesses byrncommercial banks dropped off substantially. Large loans outstandingrnbegan to rebound by the third quarter of 2010 and essentially returned torntheir previous growth trajectory while small loans outstanding continuedrnto decline. Furthermore, much of the drop in small business loansrnoutstanding was evident at community banks. To address this perceivedrnlack of supply of credit to small businesses, the Small Business LendingrnFund (SBLF) was created as part of the 2010 Small Business Jobs Act. Thernfund was intended to provide community banks with low-cost funding thatrnthey could then lend to their small business customers. As of 31 December,rn2013, the US Department of the Treasury reports that SBLF participantsrnhad increased their small business lending by $12.5 billion over theirrnbaseline numbers. The current paper uses Call Report data fromrncommunity banks and thrift institutions to look at the impact of receivingrnfunds from SBLF on their small business lending. The analysis controlsrnfor economic and demographic conditions, market structure andrncompetition. Simple regression estimates indicate that participants inrnthe SBLF program increased their small business lending by about 10rnpercent more than their non-participating counterparts, in line withrnnumbers reported by Treasury. However, estimates that control for thernongoing growth path in small business lending indicate no statisticallyrnsignificant impact of SBLF participation on small business lending.