According to DeYoung et al. [Journal of Financial Services Research, 2004] deregulation and technological change has divided the US banking industryinto two primarysize-based groups: verylarge banks, specializing in the use of ‘‘hard’’ information to make standardized loans and smaller banks, specializing in the use of ‘‘soft’’ information and relationship development to make non-standardized loans. We evaluate business-lending performance for small and large banks over the 1993–2001 period. Small business lending bysmall banks is characterized byrelationship development and non-standardized loans. Consistent with DeYoung et al.’s model, we find that, after controlling for market concentration, cost of funds, and a variety of other factors that might influence yields, smaller banks perform better than larger banks in the small business lending market. However, larger banks appear to have the advantage in credit card lending, a market characterized byimpersonal relationships and standardized loans. Interestingly, we find evidence that larger banks have been making inroads in the market for the smallest business loans, a result consistent with the use of credit scoring bylarge banks to make verysmall business loans [Berger et al., Journal of Money, Credit, and Banking, 2004].