A Closer Look: Small Business and Small Farm Lending
Small business lending is a marker of vitality, innovation, and economic well-being of a place. New businesses, often emerging in the form of small businesses, contribute to job creation as well as growth of other support industries to an area. Lending activity can indicate new business creation and a supportive business environment for entrepreneurs. Considering the recent economic crisis, the Community Reinvestment Act (CRA) Small Business Lending data can help identify the areas in which lending institutions are investing or counties where entrepreneurs are improving their neighborhoods and local economies. A prevalence in small business lending also signifies that local entrepreneurs are finding opportunities to create and start new businesses—a sign of economic development and recovery. Below is a map of Michigan State and the distribution of small business loans greater than $100,000 and less than or equal to $250,000 made in 2008 from all originations and where lending institutions have focused their efforts.
Small farms are also a marker of economic vitality. Recent research studies have reported that small farms are more sustainable, more productive, and more efficient in contributing to the economic development of a place than their larger counterparts(?). CRA data also provides information about small farm lending, further identifying counties experiencing an increase in economic development by an increase in small farms. Below is a map of small farm lending in the Michigan State counties.
For more information and discussion of small businesses and their contribution and importance to a community’s economic development, watch this video clip of Federal Reserve Chairman Ben Bernanke and TRF President and CEO, Jeremy Nowak discussing the importance of small businesses and lending structures.