I exploit exogenous changes in local credit supply from shale discoveries to identify where and when local access to finance is economically important for firms. I find that the real effects of a credit supply shock are linked to local lending market characteristics. Changes in local credit supply have significant real effects in lending markets dominated by small banks, while there is no effect in other markets. These results suggest that small banks, which do not benefit from deep internal capital markets, face economically meaningful frictions in accessing external interbank markets to fund loans. The effect in other markets, which have large multimarket banks, indicates that these markets are not as dependent on local funding sources for lending. These findings illustrate the important role that the internal capital markets of banks have on real outcomes. The online appendix is available at https://doi.org/10.1287/mnsc.2017.2818 . This paper was accepted by Amit Seru, finance.