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New report shows decline in small business lending in rural NC counties

RALEIGH — A new joint report from the NC Rural Center and Thread Capital shows that a decade after the Great Recession, North Carolina’s small businesses are still struggling to recover and catch up with their urban counterparts in the state.

The report, Small Business Dynamism in North Carolina, found that North Carolina small businesses have fewer brick-and-mortar banks operating in their communities and significantly less access to the critical commercial capital needed to start, sustain, or grow their businesses. 

Key findings include:

  • Between 2005 and 2015, there was a seven percent decline in very small business establishments in rural North Carolina (compared to a nine percent gain in urban counties).
  • Between 2010 and 2015, there were 165 bank branch reductions in rural North Carolina (compared to 32 reductions in urban counties).
  • Between 2005 and 2015, rural counties experienced a 61 percent decline in small business lending, for a total decline of more than $1.6 billion.

“Our state’s rural economies are built on the hard work of the men and women who dare to start their own businesses,” said Rural Center President Patrick Woodie.” We as a state must address the growing chasm of capital access between our rural and urban counties. The economic engines of our largest urban counties might drive our state’s economy, but it is the rural small business owner who sustains our local communities.”


Since the end of the Great Recession in 2009, the recovery in North Carolina has been a tale of two states, with urban and suburban counties returning to and even surpassing many of their pre-Recession economic indicators. In the state’s rural counties, however, where local economies have historically been more dependent on manufacturing and small business jobs, the recovery is still a work in progress. 

“The combination of decline in local bank branches and small business lending is the result of multiple economic factors, and suggests that any sustainable solution requires a broad coalition of public and private partners,” said Thread Capital Executive Director Jonathan Brereton. “If we hope to have a rural economy that is thriving and growing, we must reverse the negative trends we see in this data. We call for a collaborative effort led by our elected leaders and our local governments in close partnership with our state’s private lenders.”