Biz2Credit Small Business Lending Index for June 2013 Reports Slight Dip in Approvals at Big Banks and Credit Unions, Slight Increases in Approval Percentages by Regional Banks and Alternative Lenders

SBA Express Loan Applications and Approvals Expected to Rise in Second Half of the Year, According to Biz2Credit CEO Rohit Arora

NEW YORK, NY, July 9, 2013 - Small business loan approvals at big banks ($10 billion+ in assets) and credit unions all dipped slightly in June 2013, while approval rates inched higher at small banks and alternative lenders, according to the Biz2Credit Small Business Lending Index, a monthly analysis of 1,000 loan applications on Biz2Credit.com.

Further, loan approvals at big banks dropped to 16.9% from the all-time Index high of 17.3% in May 2013. However, in a year-to-year comparison, small business lending approvals at big banks are up 52 percent over the figure from June 2012.

"While approvals dropped slightly at big banks in June, overall small business lending rebounded in the first half of 2013. Banks, both large and small, are granting loan requests at much higher rates than they did a year ago," said Biz2Credit CEO Rohit Arora, who oversaw the research. "Small banks gained a slight bit of market share because they are more adept at offering SBA Express loans, typically under $350,000, which are easier to finalize and come without fees. When big banks start processing more SBA Express loans, we will likely see the approval percentages go up. I expect that this will happen."

Loan approvals at small banks climbed to 49.8% in June 2013 from 49.5% the previous month. In a year-to-year comparison, small banks approved at a higher rate last month than they did in June 2012, when the percentage was 47.5%.

"Small banks are granting SBA loans and continue to be strong players in small business lending," explained Arora, one of the nation's leading experts in small business finance. "Regional banks are usually more flexible and are approving a higher percentage of small business loans than big banks or credit unions, their main competition."

Approvals at credit unions continue their decline, dropping to 44.8% from 45.0% in May 2013. This represents the lowest approval rate for credit unions since the Biz2Credit Small Business Lending Index began in 2011. In a year-to-year comparison, credit union lending is down almost 20 percent in the twelve months between June 2012-13.

"The return of big banks to the small business credit market further threatens credit unions," Arora explained. "Lengthy processes to obtain loans at credit unions are often a large deterrent for customers, which have influenced the movement by higher credit-quality customers who are electing other lending platforms as their primary option."

Small business loan approvals by alternative lenders - accounts receivable financers, merchant cash advance lenders, Community Development Financial Institutions (CDFI), microlenders, and others -increased slightly to 63.4% from the 63.3% rate in May 2013. This is due, in part, to new products introduced by alternative lenders last month.

Month Big Bank
Approval %
Small Bank
Approval %
Credit Union
Approval %
Alternative
Lenders Approval %
Jun. 2012 11.10% 47.50% 55.80% 62.90%
Jul. 2012 11.30% 47.40% 54.60% 64.10%
Aug. 2012 10.90% 47.80% 52.90% 64.50%
Sept. 2012 14.20% 47.60% 52.40% 64.60%
Oct. 2012 14.80% 50.10% 49.20% 64.70%
Nov. 2012 13.20% 49.20% 48.40% 64.50%
Dec. 2012 14.90% 49.80% 47.60% 63.80%





Jan. 2013 15.30% 49.90% 46.90% 63.70%
Feb. 2013 15.90% 50.30% 45.90% 63.70%
Mar. 2013 15.70% 50.80% 45.50% 63.60%
Apr. 2013 16.80% 50.90% 45.20% 63.40%
May. 2013 17.30% 49.50% 45.00% 63.30%
June. 2013 16.9% 49.8% 44.8% 63.4%

About the Biz2Credit Small Business Lending Index

Biz2Credit analyzed loan requests ranging from $25,000 to $3 million from companies in business more than two years with an average credit score above 680. Unlike other surveys, the results are based on primary data submitted by more than 1,000 small business owners who applied for funding on Biz2Credit's online lending platform, which connects business borrowers with more than 1,100 lenders nationwide.

About Biz2Credit

Founded in 2007, Biz2Credit Business Loans is a leading credit marketplace connecting small- and medium-sized businesses with lenders, service providers, and complementary business tools. Using the latest technology, Biz2Credit matches borrowers to financial institutions based on each business's unique profile -- completed in less than four minutes -- in a safe, efficient, price-transparent environment. Biz2Credit's network consists of 1.6 million users, 1,100+ lenders, credit rating agencies such as D&B and Equifax, and small business service providers including CPAs and lawyers.

Having arranged $850+ million in funding throughout the U.S., Biz2Credit is widely recognized as the #1 online credit resource for small business loans, lines of credit, equipment loans, working capital and other funding options.Visit www.biz2credit.com, follow on Twitter @Biz2Credit, and "Like Us" on Facebook at www.facebook.com/biz2credit.