Small Business Loan Approval Percentages Again Surge at Big Banks in April, According to Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend

Small Increases Mean Millions in Profits for Banks with $10 Billion or More in Assets

ahrefstartSmall business loanahrefend approval rates for big banks (25.7%) continued the upswing with yet another new high in April 2018, according to the Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend ((April 2018 figures) released today. The monthly analysis examined more than 1,000 credit applications from small businesses on Biz2Credit.com.

Big Banks

Big Banks

Big banks (assets of $10 billion+) are granting more than one-quarter of the small business loan applications they receive. The 25.7% approval percentage, up two-tenths of a percent from March 2018, represents a post-recession high point for big banks.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

"With the Federal Reserve's continuing path of interest rates increases, small business loans are becoming more and more profitable. A small rate hike means tens of millions of dollars in profit, since the big banks' cost of capital has not changed,"

Rohit Arora

Rohit Arora, Biz2Credit CEO

Economy

"Big banks have a larger deposit base, and they can be more aggressive in lending, especially in a strong economy."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

Small business loan approval rates rose at regional and community banks. Small banks approved 49.2% of the funding requests they received in April, up two-tenths from March.

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

"Small banks typically process a lot of SBA loans, which put weight on the previous year's tax returns," ."We see an upturn every April; people wait for their tax filings and then move forward with securing capital for growth."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

institutional lenders reached yet another new Index record 64.6%, up one-tenth of a percent from March. These lenders (pension funds, insurance companies, and others), continue to be important players in small business lending.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

"Institutional investors have established themselves firmly in small business lending,". "Lending is profitable and, thanks to improved data analytics, the risks of default have never been lower. Additionally, institutional lenders offer relatively low interest rates and terms."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Loan approval rates among alternative lenders dropped slightly to 56.4%from March's 56.5 percent. Approval percentages have slipped every month for almost two years, with the exception of a small uptick in November 2017.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"Alternative (non-bank) lenders enable companies with poor credit scores to obtain capital. Because they are willing to fund businesses that do not qualify for traditional bank loans, they charge higher interest rates," Arora explained. "While the cost of capital is high, in a cash crunch, alternative lenders are willing to provide funding when others will not do so."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Credit unions approved 40.2% of loan applications in April, a one-tenth of a percent gain from March, which had set a record low for the Biz2Credit Small Business Lending Index.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

"Credit union lending to small business has stagnated," Arora said. "Not much has changed for them in the past couple of years."

Rohit Arora

Rohit Arora, Biz2Credit CEO

View Past Months

Access Archives

September 2019

Small Business Loan Approvals at Big Banks Hit New Record in September, According to Biz2Credit Small Business Lending Index™

View Report
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

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.