A broker assesses the small-business lending market.
In a recent post, I introduced my company’s effort to grade American banks on their small-business lending activity.
The Financial Services Roundtable, an association that represents some of the largest banks in America, has taken issue with our grading system. We decided to have a discussion with the organization — and share it with our readers — in the hope that it might bring some clarity to the important issue of whether big banks are committed to lending to small businesses.
A big part of the discussion involves what constitutes a small-business loan. On our report cards, we calculated the grades as a ratio of the banks’ domestic deposits to their small-business loan balances — which we define, as does the Federal Deposit Insurance Corporation, as those with a balance of $1 million or less. By contrast, when the big banks issue their own small-business lending report cards, they define loans as those made to companies with revenue of $20 million or less.
As we dug into our debate, we learned that business credit card balances are included in the small-business loans that banks report to the F.D.I.C. We realized this after the big banks defended their small-business lending records by stating that they held 80 percent of all
We recommend you visit the following site for more complete information and related topics. Article source: http://boss.blogs.nytimes.com/2012/08/08/debating-the-best-way-to-track-small-business-lending/