Bank of America story updated with response from the bank and analyst commentary.
A press release from the bank on Wednesday declares it is "taking another step in its ongoing effort to encourage small business growth," by, um, hosting a series of talks by Malcolm Gladwell, a best-selling writer from The New Yorker Magazine.
Gladwell told The Atlantic "the speech in question was about the history of the rock band Fleetwood Mac," but apparently at least one small business owner found it inspiring."Malcolm Gladwell has been a source of inspiration for me and my business for many years. I was thrilled that Bank of America provided the opportunity for me to hear his perspective on how hard work leads to business success," said Tom Kristof, founder of the Sozo Center for Assisted Living and Advancement in Gainesville, Texas in Bank of America's press release. This is all a bit strange, but if Bank of America's public relations folks think it worth promoting, that's their business. However, other than hosting talks by Gladwell, it isn't clear what else Bank of America is doing for small businesses. It certainly doesn't appear to be lending, for example. Bank of America had $17.5 billion in small business loans (including credit card lines) outstanding at the end of 2010. That number fell to $13.6 billion as of Sept. 30, 2011, a drop of 22%, according to the bank's regulatory filings. Bank of America spokesman Jefferson George points to quarterly dataBank of America began publishing on its website at the end of 2010 which he argues show the bank has actually stepped up its small business lending. According to those figures, which aren't part of the bank's regulatory filings, Bank of America extended $2.9 billion in credit to small businesses in the first quarter of this year, $4.8 billion in the second quarter and $5.3 billion in the third quarter. George took issue with the figures used by TheStreet, which describe Bank of America's small business loans outstanding. "That is credit used by borrowers and speaks to what small businesses are drawing upon in their credit lines, not the credit that banks approve for borrowers," George wrote to TheStreet via email. "Using those figures to describe how much banks are lending to small businesses is inaccurate and inappropriate, and I haven't seen other reporters or even opinion writers do it." However Richard Staite, analyst at Atlantic Equities, believes the net outstanding loan amount "is a more telling indicator of how tight credit is for small companies." According to Staite, "all banks will highlight the gross amount they've extended to small business because they're under pressure from politicians to show their continued support to these small businesses."