Competition in the small business lending market has gotten so fierce in recent months that some community banks have even begun to feel the pinch on loans backed by Small Business Administration guarantees.

For instance, a banker recently confided that his bank's credit policy requires the same amount of preparation on an SBA Low-Doc loan - which has a one-page application - as it does on loans to middle-market companies. This, despite the bank having an exposure on no more than $10,000.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.