Small Business Loans Down from Last Year

New York, NY, June 30, 2011 -- Loans outstanding to small businesses totaled $609 billion at the end of March, an 8.6% drop from a year earlier, the Wall Street Journal reported.

The newspaper said that an analysis by the Federal Reserve Bank of Kansas City shows that big banks' outstanding loans to small businesses dropped 14% between March 2010 and March 2011, while loans by smaller lenders fell 3%.

"This area of the economy is in such crisis," John K. Paglia, a finance professor and senior researcher at Pepperdine University, told WSJ.