Anita Campbell recently blogged in this space that the government’s efforts to spur small business lending have largely fallen flat. Last year I blogged here about how big banks including Wells Fargo, Bank of America and JP Morgan Chase were pledging to lend more money to small businesses in 2010. Have the banks come through on their promises?
Bloomberg Businessweek recently reported on the progress banks made for the first quarter of 2010. Reporter John Tozzi writes that assessing small business lending is difficult because at most banks, lending to small businesses can fall into several categories-from real estate to credit cards-and because banks typically don’t break out separate numbers for small businesses.
• Wells Fargo made $2.9 billion in new loans to small businesses. The bank’s total goal for 2010 was to lend $16 billion to companies with under $20 million in revenue. The $2.9 billion brings it to 18 percent of that $16 billion goal, which is an increase from the $13 billion in loans Wells Fargo made to small companies in 2009. A spokesperson says Wells Fargo hopes to reach the goal by the end of the year.
• JPMorgan Chase made new loans of $2.1 billion to small businesses. That’s 21 percent of its goal to make $10 billion in new loans to companies with under $20 million in revenue. The goal is an increase from $6 billion in 2009. A Chase spokeperson says first-quarter lending to small businesses is up 31 percent compared to the first quarter of 2009. Since announcing its new goals in late 2009, Chase has hired 235 new small-business bankers and made $110 million in “second-look loans”–loans to small-business borrowers whose applications were turned down at first, but got a second review.
• Bank of America made new loans of $3.4 billion to small companies. The bank also made $16 billion in loans to midsized companies (those with revenues under $50 million). Bank of America vowed in late 2009 to increase lending to small and midsize businesses by $5 billion in 2010. Since the bank hasn’t released comparable numbers for 2009, no comparison can be made in terms of growth or what kind of improvement these loans represent.
Given the current state of the slowly improving economy, these numbers seem fairly promising.