Small business bank lending in New Hampshire declined by 14%, or $314 million, since 2009, according to a study done for the New Hampshire Bankers Association by Brian Gottlob of PolEcon Research, the “Union Leader” reported.

Gottlob’s research found that the decline was due to both tighter credit policies at the banks, as well as decreased demand for loans by small businesses that were scaling back their growth plans and instead sought to pay down debt.   Loss of collateral value in small business owners’ homes and commercial real estate also had a negative impact on lending trends.    Gottlob’s findings echoed other studies that also have shown lower small business demand for loans has played a significant part in lower levels of bank loans during the current recession.

On a brighter note, New Hampshire’s community banks increased their lending by $70 million, or 4.6 percent in 2010, even as large national banks with limited local presence in the Granite State cut back.    New Hampshire’s overall 14% decline in bank lending to small businesses was better than the 22.1 % nationwide decline, according to Gottlob’s research, and “its more stable banking industry during this recession is one reason why NH suffered fewer economic and employment losses than occurred in a majority of states.”