The recurrent theme that the banks are hoarding money and refusing to lend to credit worthy borrowers won’t quit. It’s approaching urban legend status and therein lies the problem. All of the talk about a lack of credit to small and medium sized businesses retarding recovery has been largely based on opinion or at best anecdotal evidence.

Fortunately, the Atlanta Fed has taken a stab at testing the hypothesis and they come up with some results that call into question the conventional wisdom. The authors of the study take great pains to point out the statistical limitations of the survey they conducted so don’t take it as a definitive statement about the credit markets. It does, however, represent an attempt to pull together some data on bank lending that goes beyond the noise in the blogosphere and MSM.

What the survey did find is that by and large smaller firms are able to obtain credit. Here is the author’s conclusion:

Still, we believe the results of our survey are instructive. To the extent that the firms in our survey are representative, it appears most going concerns have been able to obtain all or most of the credit they need. What they don’t have are customers.

The actual article is quite compact, so if you have a moment, click through and take a look at it.

More of this sort of analysis and less demagoguery would go a long way towards working out sensible solutions to our current predicament.