Small business and farm loans saw large increases in 2020 due to an influx of Paycheck Protection Program funding, according to an analysis of 2020 data by the Federal Financial Institutions Examination Council.
The data, including 690 lending firms of at least $1.3 billion in assets tracked through the Community Reinvestment Act, revealed that approximately 8.4 million small business loans of $1 million or less were reported in 2020 — nearly 11 percent more than the previous year. Those loans totaled nearly $461.8 billion — a nearly 79 percent jump from 2019. PPP dollars also drove a 52 percent increase in community development loans in 2020 to $169 billion. The number of small farm loan originations of $500,000 or less decreased by slightly less than 2 percent, and the dollar amount increased by nearly 8 percent from 2019 to 20.
Nearly 9-in-10 of the small business loans and more than 78 percent of small farm loans in the study were for less than $100,000. More than 3-in-10 small business loan dollars and 28 percent of small farm loan dollars were extended through loans of less than $100,000. Nearly 41 percent of reported small business loan originations and 56.3 percent of small farm loan originations were extended to farms with $1 million of revenue or less.