Small business loans decreased in ’22, CRA data show in annual regulators’ report

Data on smallbusiness, small farm, and community development lending during 2022 was released Wednesday by the federal banking regulators, part of their annual obligation under federal anti-redlining laws.

According to the fact sheet released by the agencies, a total of 711 lenders reported data under the Community Reinvestment Act (CRA) about originations and purchases of small loans to businesses (loans with original amounts of $1 million or less) and small farms (loans with original amounts of $500,000 or less), representing a 3.7% increase from the 685 lenders reporting data for 2021.

Of those 711 lenders, the fact sheet states, 80 had assets below the mandatory reporting threshold and reported either voluntarily or because they elected to be evaluated as “large” institutions during their CRA exams.

The data also show, the regulators said, that CRA reporters account for about 74.8% of small business loans outstanding (by dollars) and about 34.3% of small farm loans outstanding (by dollars) at financial institutions.

Larger institutions account for most of the reported lending, the data sheet states. During 2022, financial institutions with assets of $1.384 billion or more (as of Dec. 31, 2021) accounted for 99.3% (by dollars) of reported small business loan originations. The very largest institutions – 154 reporters with assets of $10 billion or more – accounted for about 72% of CRA reported small business loans originated in 2022 (also by dollars), the data sheet shows.

“In the aggregate, about 8.9 million small business loans (originations and purchases) totaling nearly $284.6 billion were reported in 2022,” the data sheet reports. “The total number of small business loans (including purchases) decreased by 5.8%, and the number of small business loans originated decreased by 5.7% relative to 2021. The dollar amount of small business loans originated decreased by 24.8%. The decrease in total number of small business loans originated, and especially the total dollar amount of small business loans originated is largely due to the phasing out of the Paycheck Protection Program (PPP).

“Regarding small farm loans, the number of originations decreased by about 18.3% and the dollar amount of small farm loans decreased by 3.3% in 2022 from 2021,” according to the data sheet.

Findings from Analysis of Nationwide Summary Statistics for 2022 Community Reinvestment Act Data Fact Sheet