Abstract
This paper examines the rise and competitive impact of industry-specialized small business lenders. Using loan-level data with detailed industry codes from the Small Business Administration (SBA), we document a recent increase in lenders that originate loans nationally but to a limited number of industries. We then examine the impact of these industry-specialized lenders on credit availability and banking competition. Exploiting the staggered entry of a large, specialized lender, we find significant increases in total SBA-backed lending with no evidence of substitution from other lenders. We then explore potential mechanisms behind the increase in lending.
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