Dis-Credited: Disparate Access to Credit for Businesses in the Chicago Six County Region

This report examines geographic patterns of access to bank capital for businesses in the Chicago six county region, with a focus on smaller loans and other types of credit, amounts under $1 million, that are more likely to benefit smaller, local businesses that create economic opportunity within neighborhoods. For small neighborhood businesses to grow, they need to be able to access capital, and one common source of capital for small businesses are loans, lines of credit, and business credit cards (collectively, “small loans”) issued by banks and other financial institutions.


Data from all regulated financial institutions shows the impact of the Great Recession on the availability of credit. Lending to businesses declined by 4.8 percent nationally between 2008 and 2011. The dollar volume of small loans to businesses declined even more sharply than lending to businesses generally, down about 14.6 percent nationally between 2008 and 2011.

Data from large banks, with assets over about $1 billion, showed an even more drastic decline, with the dollar volume of small loans from those banks down 39.2 percent between 2008 and 2010. In the Chicago region, the dollar volume of small loans from large banks declined 33.2 percent over that same period.

Analyzing the data from large banks by the income level and racial/ethnic characteristics of the neighborhoods shows clear disparities in both the number and dollar volume of loans to businesses.

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