Bank Lending to Small Businesses Falls in Q1

Washington, DC, June 17, 2011 -- Small business lending by banks fell $15 billion in the first quarter, according to a report from the U.S. Small Business Administration's Office of Advocacy.

The report shows that small business lending has declined steadily during the last three quarters. The SBA report also found that lending has fallen on a yearly basis since hitting its peak in 2008.

The total amount of small business loans outstanding in March of 2011 decreased 2.4%, or $14.9 billion, to $609.4 billion at the end of 2010, the report said, which is more than twice the $6.2 billion drop between the third and fourth quarter of last year.

Outstanding small business loans by the largest lenders, defined as having assets of $50 billion or more, decreased 4.9% in the first quarter of 2011.