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Illustration: Seesaw
Featured Article, ILSR Press Room filed under Independent Business | Written by Stacy Mitchell | No Comments | Updated on May 8, 2015

How Washington Punishes Small Business

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/how-washington-punishes-small-business/

Small business looms large in American political rhetoric. From the campaign trail to the floor of the U.S. House and Senate, members of Congress love to evoke the diner and dry cleaner, the neighborhood grocer and local hardware store. Ensuring the well-being of Main Street, we might easily assume, is one of their central policy aims. The legislative track record tells another story. It is one in which the interests of big corporations are dominant, and many laws and regulations seem designed to bend the marketplace in their favor and put small, independent businesses at a competitive disadvantage. Continue reading

Photo: Community Bank Borrowers
Featured Article filed under Banking, Independent Business | Written by Stacy Mitchell | No Comments | Updated on May 5, 2015

One in Four Local Banks Has Vanished since 2008. Here’s What’s Causing the Decline and Why We Should Treat It as a National Crisis.

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/vanishing-community-banks-national-crisis/

The precipitous decline in the number of community banks in recent years is a national crisis, and there’s a fierce debate underway right now about what’s to blame. Continue reading

Graph: New banks created by year, 1993 to 2013.
Resource filed under Banking | Written by Stacy Mitchell | No Comments | Updated on Apr 22, 2015

Number of New Banks Created by Year, 1993 to 2013

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/number-of-new-banks-created-by-year-1993-to-2013/

The number of community banks has declined sharply in the last few years. Part of the decline is owed to the fact that virtually no new banks have been created since 2009. Between 2004 and 2008, an average of about 300 commercial banks disappeared each year, mostly as a result of mergers. But these losses were offset by the creation of 146 new banks each year on average. From 2009 to 2013, we continued to lose about the same number of banks annually, but gained only 6 new banks on average each year. Continue reading

Chart: Small Business Loans as a Share of Assets, 2014.
Resource filed under Banking, Independent Business | Written by Olivia LaVecchia | No Comments | Updated on Apr 20, 2015

Small Business Loans as a Share of Assets, 2014

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/small-business-loans-as-share-of-assets-2014/

Small and mid-sized financial institutions devote a greater share of their assets to small business lending. Continue reading

Chart: Share of Loans Made to Small Businesses, 2014.
Resource filed under Banking, Independent Business | Written by Olivia LaVecchia | No Comments | Updated on Apr 20, 2015

Small Business Lending by Size of Institution, 2014

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/small-business-lending-by-size-of-institution-2014/

In 2014, community-based financial institutions made 60 percent of all small business loans, even though they control only 24 percent of banking assets. Continue reading

Graph: Bad Loans by Bank Size.
Resource filed under Banking | Written by Olivia LaVecchia | No Comments | Updated on Apr 20, 2015

Percentage of Bad Loans by Size of Bank, 1999 to 2014

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/percentage-of-bad-loans-by-size-of-bank/

As this graph shows, giant banks consistently make poorer lending decisions and write-off more bad loans than community banks do, and the financial crisis heightened this trend. Continue reading

Wall Street photo
Featured Article filed under Banking | Written by Olivia LaVecchia | No Comments | Updated on Aug 20, 2014

Federal Study Confirms “Too Big To Fail” Gives Megabanks a Hidden Funding Advantage

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/federal-study-confirms-too-big-fail-megabanks-hidden-funding-advantage/

When the country’s giant banks were teetering on the verge of collapse during 2008’s financial crisis, the U.S. government stepped in to bail them out. The banks were, in a phrase that has since become infamous, “Too Big To Fail.” Would the government do it again? And does the expectation that it would step in give megabanks an unfair competitive advantage over local community banks? Those are the questions at the heart of an eagerly awaited report released at the end of July by the Government Accountability Office, a nonpartisan federal department. In a conclusion that highlights the need for more regulatory action to reduce concentration in the banking system, the G.A.O. found that the answers to both questions are “yes.” Continue reading

Photo: neighborhood business
Featured Article, Resource filed under Banking, Independent Business | Written by Stacy Mitchell | No Comments | Updated on Apr 16, 2014

Understanding the Small Business Credit Crunch

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/understanding-small-business-credit-crunch/

Even as their big competitors are awash in capital, many locally owned businesses are struggling to secure the financing they need to grow. A new ILSR analysis has found that, since 2000, bank lending to large businesses is up 36 percent, while small business loan volume has fallen 14 percent and “micro” business loans — those under $100,000 — have plummeted 33 percent. Continue reading

Graph: Change in Volume of Bank Loans to Businesses, by Loan Size, 2000-2012
Resource filed under Banking, Independent Business | Written by Stacy Mitchell | No Comments | Updated on Apr 15, 2014

Change in Volume of Bank Loans to Businesses, by Loan Size, 2000-2012

The content that follows was originally published on the Institute for Local Self-Reliance website at http://www.ilsr.org/change-volume-bank-loans-businesses-loan-size-2000-2012/

Since 2000, the overall volume of business lending per capita at banks has grown by 26 percent, but this expansion has entirely benefited large businesses. Small business loan volume at banks is down 14 percent and micro business loan volume is down 33 percent. Continue reading