Small business lending from bank lenders remained positive in 2017, but a slower pace than the previous year. The research report by the Office of Advocacy examines FDIC data to find that small banks devoted larger shares of their assets to small business loans, while large banks issued a higher total volume of small business loans. The report covers all small business loans (commercial loans of $1 million or less) and is not specific to SBA-guaranteed loans. It contains detailed appendix tables with information on small business loans outstanding and loan originations for all reporting banks by state. These tables also provide state rankings of bank lenders by small business lending ratios.

Advocacy’s small business lending report examines FDIC data to determine the state of bank lending to small businesses. This report, which analyzes loan data from June 2019 to June 2020, examines the small business lending market at the beginning of the COVID-19 pandemic. Small business loans (loans below $1 million) increased by nearly 40% from 2019 to 2020, largely due to the newly enacted Paycheck Protection Program. Alongside the report, the appendix tables provide bank level detail of small business lending activity and breakdowns at the state level.

In the second quarter, new small business lending decreased by 9.0 percent when compared to the same period in 2023 and 2.0 percent when compared to the previous quarter.

Outstanding small business commercial and industrial (C&I) loan balances increased year over year for the first time since the first quarter of 2021, despite remaining stable in the last two quarters. Although outstanding balances have increased, new lending continued to decline in the third quarter, decreasing 18.1 percent from the same period in 2022 and 16.4 percent from the previous quarter.

In the third quarter, new small business lending increased by 1.8 percent when compared to the same period in 2023. Loan demand declined for the tenth consecutive quarter.

Less than **** of applications for loans by small businesses in the United States were approved in the first quarter of 2025. The approval rate of loans to small businesses in the U.S. has remained slightly above or under the ** percent mark, except during the first years of the COVID-19 pandemic. Those figures only refer to commercial and industrial loans to non-farm small businesses.

In the second quarter, new small business lending increased by 7.5% when compared to both the previous quarter and the same period in 2024. Outstanding loan balances also increased, as most interest rates across new term loans and lines of credit decreased slightly.

Reflects total recovery rates, as a percent of the purchase amounts by purchase year, for the four large guarantied programs and an aggregate total for the small guarantied programs.

Graph and download economic data for Average Loan Size of Loans Backed by Small Business Administration (SBA), All Commercial Banks (DISCONTINUED) (EABNQ) from Q3 2012 to Q2 2017 about SBA, loans, banks, depository institutions, and USA.

U.S. Small Business Loan Market size was valued at USD 30,833.44 Million in 2023 and is projected to reach USD 56,135.67 Million by 2031, growing at a CAGR of 8.94% during the forecast period 2024-2031.The U.S. Small Business Loan Executive SummaryA small business loan is a form of financing offered to small businesses by banks, credit unions, or alternative lenders for a variety of uses, including beginning a new business, growing an existing one, buying inventory or equipment, paying for operating costs, or fulfilling other financial requirements. These loans often have terms and circumstances that are different from those of loans provided to larger firms, and they are designed specifically to meet the needs of small enterprises. There are several methods to organize small business loans: SBA (Small Business Administration) loans, invoice financing, term loans, credit lines, equipment financing, and more. The borrower's creditworthiness, the lender's policies, and the loan's intended use are some of the variables that affect the conditions of the loan, including interest rates, payback schedules, and collateral requirements. These loans are essential in helping small business owners and entrepreneurs launch, grow, and maintain their enterprises, which promotes economic growth and employment generation. But getting a small company loan frequently calls for thorough preparation, supporting documentation, and a strong business plan that demonstrates the borrower's capacity to pay back the loan.The growing need for U.S. Small Business Loan Market is driven by several factors, including the increasing number of start-ups and small businesses, availability of a variety of loan options tailored to meet the unique needs of small businesses, technological advancements in financial services, and changing consumer behavior. The United States has a supportive ecosystem for small businesses, with resources such as business incubators, accelerators, mentorship programs, and networking opportunities. These resources provide guidance, funding, and support services to aspiring entrepreneurs, helping them navigate the complexities of starting and growing a business. Thus, the number of small businesses is continuously growing in the United States. However, high interest rates act as a significant constraint on the growth of U.S. Small Business Loan Market. Businesses can be discouraged from taking out loans, leading to reduced borrowing activity and slower market growth.

SBA 7(a) and 504 loan data reports for loans approved since FY1991.

Graph and download economic data for Weighted-Average Effective Loan Rate for Small Business Administration (SBA) for Large Domestic Banks (DISCONTINUED) (EEBXSLNQ) from Q3 2012 to Q2 2017 about SBA, weighted-average, large, average, domestic, loans, banks, depository institutions, rate, and USA.

Small Business Loan Market Outlook

The global small business loan market size was valued at approximately USD 1.8 trillion in 2023 and is projected to reach USD 3.1 trillion by 2032, exhibiting a Compound Annual Growth Rate (CAGR) of 6.4% during the forecast period. The growth of this market is driven by a combination of factors including an increasing number of small and medium enterprises (SMEs) seeking financial assistance, advancements in financial technology, and supportive governmental policies aimed at encouraging entrepreneurship. As SMEs continue to contribute significantly to global economies by enhancing employment rates and contributing to GDP, the demand for small business loans is anticipated to surge, paving the way for robust market growth.

One of the primary growth factors for the small business loan market is the continued expansion of the SME sector globally. With SMEs constituting a substantial portion of businesses worldwide, there is an ever-increasing need for financial solutions that support their operational and expansion needs. This growth is further bolstered by the rise of entrepreneurial spirit, particularly in developing regions where micro and small enterprises are pivotal in economic revitalization. Additionally, the increasing digitalization of financial services has made access to loans more streamlined and accessible, thus facilitating the growth of the market by catering to a wider audience who previously might have been excluded from traditional banking services.

Moreover, the advent of financial technology (fintech) has dramatically transformed the landscape of small business lending. Fintech companies have introduced innovative solutions that not only expedite the loan approval process but also offer more flexible loan terms that are tailored to the specific needs of small businesses. These technological advancements have significantly reduced the barriers of entry for small businesses to access capital, allowing them to thrive and expand. Additionally, AI-driven credit scoring systems and machine learning algorithms have improved risk assessment, enabling lenders to offer competitive interest rates and terms, further fueling market growth.

Supportive government measures and policies are another driving force behind the growth of the small business loan market. Many governments recognize the crucial role SMEs play in fostering economic growth and job creation, leading to the implementation of favorable policies such as tax incentives, subsidies, and guarantees to encourage lending to small businesses. Programs like the Small Business Administration (SBA) loans in the United States and similar initiatives across Europe and Asia Pacific are exemplary of how government support can stimulate market growth by mitigating risks for lenders while providing much-needed capital to small enterprises.

Regionally, the small business loan market exhibits diverse growth patterns. North America remains a significant market due to its well-established financial infrastructure and the presence of numerous SMEs. However, the Asia Pacific region is expected to witness the highest growth rate during the forecast period, driven by rapid industrialization, a burgeoning start-up ecosystem, and proactive governmental support for SMEs. Meanwhile, Europe and Latin America are also witnessing increased demand for small business loans, propelled by technological advancements and economic recovery efforts. The Middle East & Africa, although smaller in market size, is experiencing steady growth due to rising entrepreneurial activities and improved financial access.

Loan Type Analysis

The categorization of small business loans into term loans, SBA loans, business lines of credit, invoice financing, equipment financing, and others, offers a comprehensive understanding of the varied financial solutions available to meet the diverse needs of small businesses. Term loans are one of the most traditional forms of financing, offering a lump sum amount to be repaid over a set period with interest. This type of loan is particularly appealing to small businesses looking to invest in capital expenditures, expansion projects, or to cover significant one-time expenses. The predictability and structured repayment plan of term loans make them a preferred choice for many small business owners.

SBA loans, backed by government guarantees, provide small businesses with access to financing that might be otherwise unavailable through conventional channels. These loans are designed to support the growth and development of small businesses by offering lower interest rates and

In the first quarter, new small business lending decreased when compared to the previous quarter, while outstanding loan balances increased slightly. Interest rates for term loans moved closer to parity for urban and rural banks, while most rates on lines of credit increased.

New small business commercial and industrial (C&I) lending increased by 9.3 percent when compared to the previous quarter but remained unchanged when compared to the same period in 2022.

Graph and download economic data for Percent of Value of Loans, Small Business Administration (SBA) Backed for All Commercial and Industry Loans, All Commercial Banks (DISCONTINUED) (EBANQ) from Q3 2012 to Q2 2017 about SBA, commercial, percent, loans, banks, depository institutions, industry, and USA.

The global small business loan market is projected to reach a value of USD 1,523.3 billion by 2033, expanding at a CAGR of 6.4% from 2025 to 2033. The growing demand for working capital, equipment purchases, and business expansion is fueling market growth. Furthermore, the emergence of online lending platforms and government initiatives to support small businesses are expected to contribute to market growth. The market is segmented based on application into large enterprise and medium-sized enterprise. The large enterprise segment is estimated to hold the largest market share due to the high demand for loans for expansion, capital expenditures, and working capital. The medium-sized enterprise segment is projected to grow at a higher CAGR during the forecast period. The market is also segmented based on type into short-term loans, medium-term loans, and long-term loans. The short-term loans segment is projected to account for the largest market share due to their flexibility and ease of access for small businesses. The medium-term and long-term loans segments are expected to grow at a higher CAGR during the forecast period as businesses seek loans for expansion and capital expenditures.

Advocacy’s small business lending report examines FDIC data to determine the state of bank lending to small businesses. Between June 2017 and June 2019, small business lending remained positive, though below the increase in lending to large businesses. This report examines all small business loans (commercial loans valued at $1 million or less) and is not specific to SBA-guaranteed loans. The data in the report provides a snapshot of the credit market before the beginning of the COVID-19 pandemic. In addition, the appendix tables provide rankings of top bank lenders by small business lending ratios. This year, detailed state tables are provided to spotlight the small business lending activity in each state.

The historical tables present the CSBFP statistical information on the loans and claims since April 1, 1999. Loans and claims are shown by province and territory, size of loans, asset type, industry sector, age of business, business size, type of borrower and type of operation. A summary of all financial activities per fiscal year as well as revenues and expenses are also available.

Reflects the number of loans approved by fiscal year for the major programs and aggregate totals for the other direct and guarantied programs.