In bank reporting, a business loan with an original amount of $1,000,000 or less that is a commercial and industrial loan or is secured by nonfarm nonresidential real estate.
The CRA rules in use define a small business loan by pointing to the call report: it is a loan included in loans to small businesses on Schedule RC-C. There, the category covers loans secured by nonfarm nonresidential property and commercial and industrial loans with original amounts of $1,000,000 or less, in three buckets: $100,000 or less, more than $100,000 through $250,000, and more than $250,000 through $1,000,000.
The test is the size of the loan, not the size of the borrower. A $600,000 loan to a large company counts; a $2,000,000 loan to a corner store does not. Banks other than small banks also report, each year by March 1, how many of these loans went to businesses with gross annual revenues of $1 million or less, by census tract.
This shapes how a bank sees a request. A loan under $1,000,000 to a local business inside the bank’s assessment area adds to a line examiners count. It also explains a common confusion: this is not the SBA’s definition of a small business, and not the one in the section 1071 rule.
How it shows up in the data here
This site shows the call report side of this definition: for each bank, the number and balance of nonfarm nonresidential loans held with original amounts of $1,000,000 or less, and the same for commercial and industrial loans. Banks with 40% or more of that real estate book in such loans appear under small-balance CRE lenders; see also business lenders. The CRA loan files that larger banks report by census tract are not loaded.
Go further
- Small-balance CRE lenders: Banks whose commercial real estate book is mostly loans of $1,000,000 or less.
- Business lenders: Lenders by business loans held.
- Data dictionary: The loan-size fields from Schedule RC-C Part II.
- How to read Community Reinvestment Act data: CRA data is the only public count of small business and small farm loans made by county. It is reported by larger banks only, in three size bands, with no borrower and no loan detail.
- How to read a bank call report as a loan searcher: Every bank files a call report each quarter. One schedule in it lists the bank's loans by kind. Read that schedule and you know what the bank holds. You still do not know what it made last quarter.
Related terms
- Community Reinvestment Act (CRA): The 1977 federal law that directs bank regulators to assess how well each bank helps meet the credit needs of its local communities, including low- and moderate-income neighborhoods.
- Schedule RC-C: The call report schedule where a bank lists the loans and leases it holds by category, such as construction, multifamily, nonfarm nonresidential, farmland and commercial and industrial loans.
- Section 1071 (small business lending data rule): The part of the Dodd-Frank Act, carried out in Regulation B subpart B, that will require larger lenders to collect and report data on credit requests from small businesses.
- Community development loan: Under the Community Reinvestment Act rules, a loan whose primary purpose is community development, such as affordable housing or financing for small businesses and farms.
- Assessment area: The geographic area a bank draws around its main office, branches and deposit-taking ATMs, inside which regulators judge its record under the Community Reinvestment Act.
- SBA size standard: SBA's test that a business and its affiliates are small enough for a loan: the limit for its industry in 13 CFR 121.201, or an alternative of $20 million net worth and $6.5 million net income.
Sources
Plain definitions for orientation, not legal, tax or credit advice. A lender's own policy decides what it will do.