Participants in the U.S. business loan market contribute more than $ 2.7 trillion in economic output and employ tens of millions of Americans, LSTA-sponsored study finds
NEW YORK–(COMMERCIAL THREAD)–The Loan syndication and trade association (“LSTA”), the industry association for the US syndicated loan market, today released a study measuring the contributions of the institutional syndicated loan industry to the US economy in 2020. Based on data provided by Information group, the LSTA, S&P, the FDIC, and various state and federal governments, the syndicated loan industry contributes more than $ 2.7 trillion in economic output and employs more than 10 million Americans.
This study, commissioned by the LSTA and carried out by the economic research firm John Dunham & Associates (“JDA”), examines both the lending side of the syndicated lending industry, represented by major international, national and regional banks, mutual fund companies, pension funds and other financial institutions, as well than borrowers, including domestic US companies with a rating below Baa3 or BBB. There are 326 loan companies and 1,140 borrowers represented in the research.
One of the most important findings of the study is that syndicated credit activity generates economic activity in every congressional district of the United States and generates more than $ 288 billion in federal and state tax revenue.
“This research demonstrates that a fair and efficient business loan market can propel U.S. businesses forward and help facilitate growth across the country and in virtually every industry, ”said LSTA Executive Director Lee Shaiman. “Even with an ongoing pandemic and the resulting economic uncertainty, syndicated loans will continue to play a vital role in supporting the economy. ”
This analysis of the syndicated loan market uses standard econometric models, maintained by IMPLAN, and adopts an accounting framework to identify the relationships between different inputs and outputs across industries and sectors. IMPLAN uses a national model representing the “average” condition for a particular industry.
Shaiman said: “The results show that the top five borrowing industries include business and personal services, retail, travel and entertainment, manufacturing, and transportation and communications. Continuing to support businesses in all of these sectors will be essential to revive the U.S. economy as we navigate the continuing effects of COVID-19. ”
Read the full study here.