Financing Baltimore’s Growth: Strengthening Lending to Small Businesses

In 2017, the Johns Hopkins University 21st Century Cities Initiative published a report on the capacity of the financing system to support small businesses and startups in Baltimore City. The report covered both venture capital and loan capital flowing to small firms located in Baltimore, documenting $500-600 million in annual investments. Loans from banks are the largest source of financing for Baltimore’s small businesses, responsible for about half of total investments per year. As a follow-up to the 2017 report, this paper takes a deeper look into the dynamics of bank lending to small businesses in Baltimore City. Our analysis covers the most recent available 10 years of loan and deposit data that banks are required to report to federal regulators (2007-2016).