Crop damage, local climate risk perceptions, and small business access to credit
Publication Date
6-1-2025
Document Type
Article
Publication Title
International Review of Financial Analysis
Volume
102
DOI
10.1016/j.irfa.2025.104096
Abstract
This paper examines the impact of natural disasters on Small Business Administration (SBA) 7(a) loan originations, highlighting how such events influence lenders' perceptions of climate and thus affect credit access for small businesses. We find a significant reduction in SBA loan originations in disaster-affected counties, suggesting a more cautious approach by lenders. This paper also explores how geographical diversification and minority ownership affect loan origination and investigates the role of public climate belief in shaping lending activities. The findings highlight the important connection between natural disasters and bank lending decisions, offering valuable insights into the challenges small businesses face in areas affected by climate change.
Keywords
Climate change, Local banks, Minority banks, Natural disasters, Small business loan
Department
Accounting and Finance
Recommended Citation
Jun Duanmu, Yongjia Li, Salman Tahsin, and Jiayi Xu. "Crop damage, local climate risk perceptions, and small business access to credit" International Review of Financial Analysis (2025). https://doi.org/10.1016/j.irfa.2025.104096
