Biz2Credit's August Small Business Lending IndexsuperscriptstartTMsuperscruptend Shows SBA Shutdown Impacted Lending

Institutional Lenders Continue to Gain Market Share While Smaller Banks/Credit Unions Decline in Loan Volume

The Biz2Credit August Small Business Lending Index dropped by 0.1 points for big and small banks, an indication that the SBA budget scare effected growth in loan demand. Another key finding of the monthly analysis of 1,000 loan applications from ahrefstartBiz2Credit.comahrefend showed that credit unions continued to decline as institutional lenders rise and become more aggressive.

Big Banks

Big Banks

Big banks ($10 billion+ in assets) decreased slightly, approving 22.3% of small business loan requests in August, down from 22.4% in July.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

"We were disappointed to see that the SBA's temporary shutdown in July scared some customers away from loans, a factor that hurt big and small banks".

Rohit Arora

Rohit Arora, Biz2Credit CEO

Economy

"Luckily, the drop was not massive and our analysis showed the march of customers towards more online channels is accelerating as the economy picks up and small business owners enter into the year-end busy season."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

Lending approval rates at small banks dropped one-tenth of a percent in August to 49.1% from 49.2% last month. For the tenth consecutive month, small banks have denied more than half of their loan requests.

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

Institutional lenders

Institutional lenders

Institutional lenders approved the most loans out of all the categories: 61.8% in August, up from 61.7% in July. Lending approval rates at institutional lenders have exceeded those of alternative lenders, such as merchant cash advance companies, factors and other non-bank lenders.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

"Institutional lenders as a class of investors is growing the fastest as more long term funding is entering the small business lending space. Institutional lenders are also getting into commercial real estate (CRE) and equipment financing within the small business lending landscape."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Second to the institutional investor approval rates were alternative lenders. While still a large part of the market share, alternative lenders remained flat at 61% in August for the third month in a row. Alternative lenders' approval percentages have steadily declined since January 2014, coinciding with the emergence of institutional lenders in the small business lending marketplace.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"In the last few months as banks and institutional investors have gotten more aggressive in the marketplace, alternative lenders like cash advance and MCA players have become less competitive," . "For example, these companies are charging higher rates and providing shorter terms to borrowers."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Credit unions approved 42.8% of loan applications in August, down one-tenth of a percent compared to July.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

View Past Months

Access Archives

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
April 2019

Small Business Loan Approvals at Banks Jumped Again in April Biz2Credit Small Business Lending IndexTM

Credit Union Lending Remains at Post-Recession 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.