Are There Competitive Concerns in “Middle Market” Lending? Accessible Data

Figure 1: Aggregate In-Market Lender Share, by Firm Size and Loan Size

Figure 1 has two panels.

The upper panel plots the fraction of credit supplied by banks with branch locations inside the geographic market (Y-axis) by bins of the borrower's annual sales volume (X-axis). There are 7 sales bins ranging from 1 to 5 million dollars up to 150 to 250 million dollars. A solid-black line plots the in-market bank share for State-based markets, and a grey-dashed line plot the in-market bank share for Federal Reserve Banking Markets. The gap between the two lines is about 5 percent through the range of firm size, with State-based market having a slightly higher in-market share. For both geographic market definitions, the fraction of credit supplied by in-market banks quickly declines from about 85 percent for the smallest firms (1 to 5 million sales) to about 70 percent once borrowers have 10 to 25 million dollars in sales, over the first three bins of sales. For both geographic market definitions, from 10 million dollars in sales to 250 million dollars in sales, the latter 5 bins of sales, the fraction of credit supplied by in-market banks is relatively flat and ranges from about 70 percent to about 75 percent.

The lower panel plots the fraction of credit supplied by banks with branch locations inside the geographic market (Y-axis) by bins of the loan's size as measured by credit limit (X-axis). There are 9 loan size bins ranging from less than 1 million dollars to greater than 50 million dollars. A solid-black line plots the in-market bank share for State-based markets, and a grey-dashed line plot the in-market bank share for Federal Reserve Banking Markets. The gap between the two lines is again about 5 percent through the range of firm size, with State-based market having a slightly higher in-market share, except for loans of less than 1 million dollars which show no difference between geographic market definitions. For both geographic market definitions, the fraction of credit supplied by in-market banks quickly declines from about 95 percent for the smallest loans (less than 1 million) to about 65 percent for the next-to-largest loan size bin (25 to 50 million), and then both lines tick upward to about 70 percent for the largest loan size bin (greater than 50 million).

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Last Update: August 10, 2020