Journal Article
The quantity and character of out-of-market small business lending
Abstract: Most small business lending from banks originates with institutions that have a local branch, but out-of-market lending does not. Supporting the view that proximity is conducive to lending, I find that only about 10 percent of small business lending is from banks with no branch in the local market. About half of this appears to be from banks with a branch in the same state, further supporting the role of proximity, while, at the same time, supporting the current regulatory practice of considering out-of-market loans when assessing local competitive conditions. I also find that out-of-market and in-market loans are of similar average size and are about equally likely to be secured by commercial real estate.
Keywords: Loans; Bank loans; small business finance;
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File(s): File format is application/pdf http://www.frbsf.org/economic-research/publications/economic-review/2008/er31-39.pdf
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Bibliographic Information
Provider: Federal Reserve Bank of San Francisco
Part of Series: Economic Review
Publication Date: 2008
Pages: 31-39