Small-Business Borrowing Still Slumps

U.S. small-business lending never quite regained the ground lost during the Great Recession, research from the Federal Reserve Bank of Cleveland finds, as reported in a Wall Street Journal blog.

The data shows the volume of small loans, those under $1 million, dropped significantly between 2008 and 2012. The Federal Reserve study reports small commercial and industrial loans grew only 3.4% over the past year.

“This modest improvement does not provide strong assurances about the health of lending in this space,” said Ann Marie Wiersch, author of the report. She noted that lending to larger businesses recovered more quickly, and loans outstanding are now 24% above pre-recession levels. Banks held an estimated $590 billion of small-business loans in the third quarter, according to the Federal Deposit Insurance Corp., 17% below 2008 highs. S