Small Biz Loan Approval Rates Rebound at Big Banks, Institutional Lenders in August 2016, According to Biz2Credit Small Business Lending Index

Small banks and Alternative Lenders Experience Setbacks

Loan approval rates at big banks ($10 billion+ in assets) bounced back in August 2016, according to the most recent Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend, the monthly analysis of more than 1,000 small business loan applications on Biz2Credit.com. Further, approval percentages at institutional lenders hit a new Index high. Meanwhile, approval rates at small banks and alternative lenders and credit unions stalled.

Big Banks

Big Banks

Small business loan approval rates at big banks improved to 23.3% in August, up two-tenths of a percent from July's figure. It was the sixth time in the last seven months that lending approval rates improved among big banks. In a year-to-year comparison, big banks are approving funding requests a full percentage point higher than they were in August 2015.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

" Big banks anticipated that the Federal Reserve would raise interest rates this summer."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Economy

"Now, a rate hike seems to be on hold indefinitely, and the banks find themselves behind in their target goals. Now, they are aggressively seeking to close more deals."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

Meanwhile, lending approval rates dropped slightly at small banks to 48.8% last month.

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

"Small banks are increasingly becoming more digitally savvy, but not enough of them are making it a top focus". "Right now, money can be borrowed cheaply. Conventional rates are lower than SBA loans, which is a popular loan product that small banks utilize."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

Institutional lenders' loan approval rates improved to an all-time high of 62.9% in August 2016. For the first time since February 2016, institutional lenders had consecutive months of increases in loan approval rates.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

"The gradual ascent of institutional lenders is related to the attractive terms and the speed by which this category of lender can offer funding", one of the nation's leading experts on small business finance. "High yields and low default rates enables this category of lenders to approve a high percentage of loan requests."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Alternative lenders experienced a decrease in loan approval rates in August, approving 59.9% of loan requests. It is the first time in five years (August 2011) that this category of lenders is approving less than three-in-five loan requests. Further, it is the fifth time in the last six months that loan approval rates have declined.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"Alternative lenders filled the void for small business lending during the Credit Crunch, but since then have steadily lost favor because borrowers no longer have to borrow at any cost and other categories of lenders are simply offering more attractive terms". "As the economy continues to improve, so does the competitiveness in the small business finance marketplace. Alternative lenders lost their advantage of speed because other lenders invested into digitization and expediting loan requests."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Loan approval rates at credit unions were stagnant in August, and remain at an all-time Index low of 41.5%. However, it was the first time that loan approval rates didn't drop in this category of lenders in over a year.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

"Credit unions continue to lag behind in the times and are becoming almost irrelevant when it comes to small business loans". "They're being overtaken by other categories of lenders and until they modernize, credit unions will continue to stagnant in small business lending."

Rohit Arora

Rohit Arora, Biz2Credit CEO

View Past Months

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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

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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
March 2019

Small Business Loan Approvals at Big Banks Hit New High: Biz2Credit Small Business Lending IndexTM

Credit Union Lending Percentages Drop to Historic, 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.