A new free service by Philadelphia-based MultiFunding rates banks according to their lending patterns. Through a tool called BankingGrades (available on MultiFunding’s website), company owners can search by zipcode, city/state or bank name to discover which banks in their area are considered most friendly towards small businesses.

The formula appears rather simple. US banks are given a grade based on the ratio of the small-business loans they provide versus the amount of their domestic deposits. In other words, “the more they lend, the higher their grades,” says Ami Kassar, MultiFunding’s founder and CEO.

The rankings also take into account data that the banks must self-report to the Federal Deposit Insurance Corporation each quarter.

But not everyone agrees that this is a fair formula. Elise Brooks, director of communications for the Financial Services Roundtable, says that BankingGrades “myopically ignores” commitments that larger financial institutions make to small businesses, while glorifying the work of smaller banks. She says that banks should be evaluated on more than just their small-business lending.

“From offering financial education about putting together an attractive loan application to providing online resources, networking opportunities, and rebates for small business owners – the breadth and depth of this commitment goes beyond a simple loans to deposits ratio,” says Brooks, whose association represents some of the nation’s largest banks and other financial institutions.

Kassar counters that ultimately small business loans are the crucial element in today’s economy. “Proper access to capital for small-business owners and entrepreneurs is one of the most critical issues facing our economy,” says Kassar. “And despite this, it’s so tough to find the right bank or lender to go to.”

So how, precisely, does BankingGrades help small business owners? Primarily by saving them time, says its creator. MultiFunding does the research that would ordinarily fall on the shoulders of small business owners themselves.

Kassar’s hope for the new service is that it will make life a little simpler for small business owners looking for loans and will ultimately help in creating jobs.


Chun, Janean. “Best Banks For Small-Business Loans.” Huffington Post. May 22, 2012. http://www.huffingtonpost.com/2012/05/22/best-banks-small-business-loans_n_1522535.html.

Kassar, Ami. “Grading Banks on Their Small-Business Lending.” The New York Times Online. June 27, 2012. http://boss.blogs.nytimes.com/2012/06/27/which-banks-really-want-to-lend-to-small-businesses/?ref=smallbusiness.

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