Small business commercial and industrial loans decreased nearly 14 percent in 2Q 2021 from the previous quarter, according to the Federal Reserve Bank of Kansas City’s Small Business Lending Survey.
The survey of U.S. banks, released Thursday, found that decrease to be “coincided with the end of the Paycheck Protection Program and increased PPP loan forgiveness payments.”
Other findings included:
- Outstanding small business C&I loan balances decreased 13.4 percent year-over-year in 2Q 2021, reversing seven consecutive quarters of year-over-year increases.
- New small business C&I loan balances decreased by 81.7 percent compared to 2Q 2020. The percentage of those loan balances guaranteed by the Small Business Administration declined to 32 percent.
- Survey participants reported increased loan demand and borrower credit quality amid tightening credit standards.
The Small Business Lending Survey provides information on lending activity and terms for small businesses. The study includes quantitative and qualitative statistics on credit market conditions for banking lending to small businesses across the country.
The Federal Reserve Bank of Kansas City includes Colorado, Kansas, Nebraska, Oklahoma, Wyoming and parts of western Missouri and northern New Mexico.