Posted by: John Tozzi on May 5, 2010
When Bank of America’s CEO announced last December that the bank planned to increase lending to small and medium-sized businesses by $5 billion in 2010, the bank didn’t say what the baseline for that increase was, so it was difficult to judge how significant that $5 billion headline number was.
Today we got some useful context from BofA. In 2009, the bank loaned $81.4 billion to small and mid-sized businesses, which it defines as companies with less than $50 million in revenue. (“Small” businesses have less than $20 million.) So the pledged $5 billion increase represents a 6% increase over the bank’s 2009 lending. We don’t have comparable numbers from before 2009.
As we reported yesterday, BofA made $19.4 billion in loans in this category in the first quarter, which we can now tell is 22.5% toward its goal.
As we and others have noted, banks’ claims about small business lending are exceedingly difficult to verify. It’s generally not reported on a separate line in financial statements, and it cuts across many different business lines, including commercial real estate, retail banking, credit cards, etc. We’re doing our best to track lenders’ statements on small business credit and watch how they follow through.