Boston, MA – Over one-third of businesses in the Commonwealth’s Gateway Cities are in low-income tracts but receive just 22.9% of the number of loans from financial institutions, according to a report based on 2022 data released today by the Partnership for Financial Equity.

Small Business Lending Matters was prepared by the Chicago-based Woodstock Institute as part of a multi-year research partnership with the Partnership for Financial Equity. Some of the key information and findings in the report include the following:

•In the state as a whole, 9.6 percent of businesses are in low-income tracts, and those businesses receive 6.6 percent of reported small business loans of $100,000 or less.

•In Gateway Cities, businesses in low-income tracts had a dollar amount per loan of $12,100, comparable to businesses located in moderate, middle and upper income tracts in those same cities.

•15.7 percent of businesses across the state are located in neighborhoods that are majority minority. Those businesses receive 14.3 percent of the number of loans and 13.1 percent of the amount of dollars loaned. Both numbers are up slightly from 2021.

•In Boston, over 45 percent of census tracts in Boston are majority minority but only 31.5 percent of business are located in those tracts, and those businesses receive 29.3 percent of dollars lent.

•In Gateway Cities 44.6 percent of census tracts in Gateway Cities are majority minority, and 47.9 percent of business are located in those tracts. Those businesses receive nearly 43 percent of the number and amount of loans.

•In Hampden County, home to Springfield and Holyoke, 37.1 percent of businesses are in majority minority census tracts but those businesses received less than 25 percent of loan dollars.

•The data show traditional credit card lenders and fintechs are among the top lenders in every county. When examining just business lending in low- to moderate-income neighborhoods, Eastern Bank was the top lender in Barnstable County, Citizens Bank in Suffolk County, Florence Bank in Franklin County and TD Bank in Worcester County.

 

About Partnership for Financial Equity
Partnership for Financial Equity was established in 1990 to bring together community organizations and financial institutions to affect positive change in the availability of credit and financial services across the Commonwealth by encouraging community investment in low- and moderate-income communities and communities of color. We are funded through the financial support of member financial institutions, community development organizations and others. Our Board of Directors consists of an equal number of representatives from leading community organizations and financial institutions.

About Woodstock Institute
At Woodstock Institute, our mission is to advance economic justice and racial equity within financial systems through research and advocacy at the local, state, and national levels. Woodstock Institute envisions a society where all people experience economic security and prosperity.