Loan Approval Rates at Big Banks, Institutional Lenders Continue Upwards, Set Record Highs, According to April 2015 Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend

Approval Percentages at Small Banks, Alternative Lenders and Credit Unions Mostly Stagnant

Small business loan approval rates at big banks and institutional lenders continue to control the lion's share of the market demand while reaching new post-recession highs for April 2015, according to Biz2Credit Small Business Lending Index, the monthly analysis of 1,000 loan applications on Biz2Credit.com.

Big Banks

Big Banks

Big banks ($10 billion+ in assets) approved 21.7% of small business loan requests in April 2015, up from 21.6% in March. Moreover, big banks' loan approval rates have improved for six consecutive months and in 12 of the last 13 months.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

"Now that 2014 tax returns have been filed, it is evident that the economy is doing better. I expect that loan approval rates will continue to go up in the foreseeable future."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Economy

"Big banks are more willing to grant bigger loans to business owners that have a track record of proven success."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

Lending approval rates at small banks improved one-tenth of a percent in April to 49.6% from 49.5% last month. Although the rate of funding requests improved, this category of lenders has denied more than half of their loan requests for sixth consecutive month. Albeit a slight rebound, it is the first time that lending approval rates have improved at small banks over the last 11 months.

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

Institutional lenders

Institutional lenders

Meanwhile, institutional lenders approved 61.1% of funding requests by small business owners in April, up from 60.9% in March 2015. Approval rates by institutional lenders have increased each month ever since Biz2Credit began monitoring this category of lenders in January 2014.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

"Institutional lenders are becoming mainstream lenders in the small business market and are supplanting cash advance companies among non-bank sources of capital" . "Since advance companies charge a premium rate, the laws of economics dictate that unless you differentiate the product, eventually a lower price competitor will steal the market share. We have seen this happen to cash advance companies."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Approval rates at alternative lenders -- merchant cash advance companies, factors, and other non-bank institutions - dipped to an Index-low of 61.1% in April, from 61.2% in March. Alternative lenders' approval percentages have declined each month since January 2014, coinciding with the emergence of institutional lenders in the small business lending marketplace. For the first time ever loan approval rates at institutional lenders and alternative lenders have matched each other, according to the monthly Index figures.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"Cash advance companies use a network of brokers who charge 8-10 percent upfront." "This fee is factored in the form of high interest rates, which are working against alternative lenders. Meanwhile, institutional lenders make deals happen faster through electronic marketplaces, such as Biz2credit's platform, and offer more attractive rates."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Credit unions approved 43% of loan applications in April, a slight drop from 43.1% in March 2015.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

"Credit unions are not adapting to their counterparts quickly enough with respect to improvements in technology," Arora said.

Rohit Arora

Rohit Arora, Biz2Credit CEO

View Past Months

Access Archives

Aug 2019

Small Business Loan Approvals at Banks Continue to Reach New Heights, According to August 2019 Biz2Credit Small Business Lending Index™

View Report
July 2019

Small Business Loan Approvals at Banks Hit Record Highs, According to July 2019 Biz2Credit Small Business Lending IndexTM

Alternative Lending Drops and Credit Unions Sink to a Record Low

View Report
June 2019

Small Business Loan Approvals at Big Banks Hit Record Highs, According to June 2019 Biz2Credit Small Business Lending IndexTM

Big Banks, Regional and Community Banks, and Institutional Lenders Climb, While Alternative Lending Drops and Credit Unions Sink to New Low

View Report
May 2019

Small Business Loan Approvals at Big Banks Stay at Record Post-Recession High, According to May 2019 Biz2Credit Small Business Lending IndexTM

Small Banks and Institutional Lenders Climb, Credit Union Lending Remains at Post-Recession Low, Alternative Lending Stalls Again

View Report

About Biz2Credit Small Business Lending IndexTM

The Biz2Credit Small Business Lending IndexTM is an analysis of 1,000 monthly loan applications on the Biz2Credit website. The Index reports the loan approval rates of small business financing requests at Big Banks ($10 billion+ in assets), local and regional banks and non-bank lenders (credit unions, Community Development Financial Institutions (CDFI), micro lenders, and others).

Unlike other surveys, the results are based on primary data submitted by more than 1,000 entrepreneurs who applied for funding on Biz2Credit's online lending platform, which connects small business borrowers with sources of capital.

Results of the Biz2Credit Small Business Lending IndexTM have been reported by The Wall Street Journal, Bloomberg BusinessWeek, Entrepreneur.com, Bloomberg Radio's "The Hays Advantage", SBA Radio, NY Daily News, Crain's NY Business, Michigan Banker, and other media.