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virtual cessation of securitization of some of the loans used by small businesses, such as commercial real estate mortgages …, vehicle, and credit card loans. In addition, values of commercial and residential real estate, which small businesses often … use as collateral for loans, dropped dramatically. As a consequence, small businesses may have experienced tighter credit …
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This Economic Letter examines what the data say about the relationship between the degree of competition in and total volume of small business lending in local geographic banking markets.
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Historically, small businesses have tended to turn to local lenders for credit. In recent years, however, technological advances in processing information and assessing credit risk have raised the potential for loosening the geographic ties between small business borrowers and lenders. This...
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