CRA: More Small Business Loans at Fewer Dollars

The number of small business loans made in 2021 increased but the dollar amount decreased.

The same applies to loans for small farms, according to A Information sheet on findings from a national summary statistics analysis for 2021 Community Reinvestment Act (CRA) data released Thursday (Dec. 15).

Total small business loans, including both originations and purchases, increased in 2021 by 12.6% compared to the previous year, but the dollar amount of loans decreased by 21%.

In 2021, there are about 9.4 million such loans, and their dollar amount amounted to $371 billion.

Similarly, total loans to small farms increased by 26.4% in 2021 compared to 2020, while the dollar amount decreased by 1.2%.

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This data includes data collected for banks, savings and loan associations, and savings banks reporting under CRA regulations.

The data was collected by the three members of the Federal Banking Agency of Federal Financial Institutions Examination Board (FFIEC) with CRA responsibility: the Board of Governors of the Federal Reserve SystemGod The Federal Deposit Insurance Corporation And the Office of the Comptroller of the Currency.

“The CRA requires the federal banking agencies to use their authority when examining financial institutions to encourage such institutions to help meet the credit needs of the local communities in which the institutions are chartered, consistent with the safe and sound operation of such institutions,” the fact sheet said.

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Most loans in 2021 were in amounts below $100,000, with approximately 92% of small business loans and 83.8% of small farm loans being below this threshold.

In terms of dollar amount of loan origination, approximately 35.5% of small business loan dollars and 31.5% of small farm loan dollars were included in loans of less than $100,000.

Small businesses with revenues of $1 million or less received about 47.1% of small business loans and 29% of the dollars, while small businesses of the same size accounted for 59.3% of small business loans and 67.7% of the dollar amount. .

The PYMNTS study found that the overall financial health of Small to medium businesses (SMBs) is better than a previous, pre-pandemic peak, and is better than seen during the Great Recession.

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At the same time, small and medium-sized companies face inflationary pressures that affect consumer sentiment and are therefore a headwind to growth, according to “Main Street Index Q3 2022.”

How consumers pay online with stored credentials
Convenience drives some consumers to store their payment credentials with merchants, while security concerns give other customers pause. For “How We Pay Digitally: Stored Credentials Edition,” a collaboration with Amazon Web Services, PYMNTS surveyed 2,102 U.S. consumers to analyze the consumer dilemma and discover how merchants can beat holdouts.

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