Big Banks and Institutional Lenders Hit Record High Small Business Loan Approval Percentages in August, According to Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend
Loan application volume and approvals rise during normally slow period.
ahrefstartSmall business loanahrefend approval rates for big banks reached another high point in August 2018, according to the Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend released today.
Big Banks
The August approval percentage for big banks (assets of $10 billion+) rose two-tenths of a percent from July's figure of 26.3% to 26.5%, according to Biz2Credit's monthly report, which examines more than 1,000 credit applications made by small businesses via the company's online lending platform.
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"When you combine a strong economy, healthy retail demand, and the willingness of small business owners to reinvest their savings from tax cuts, it creates a positive atmosphere for small business lending. Business owners bullish on the economy. Retail sales are up, and sectors such as transportation, logistics, warehousing, and construction are performing extremely well,"
Rohit Arora, Biz2Credit CEO
U.S. ahrefstarteconomic growth was strongerahrefend than initially thought in the second quarter, according to a recent report by Reuters and CNBC.
In fact, it was the economy's best performance in nearly four years. Further, the Bureau of Labor Statistics reports that over 200,000 jobs were created in the economy during August. Leading the way in creating new positions were professional and business services, health care, wholesale trade, transportation and warehousing, according to the ahrefstartSept. 7 Jobs Report.ahrefend
“Right now, business owners are confident in the future of their firms. August is typically a slow month for loan volume, but that wasn’t the case this year,”
Rohit Arora, Biz2Credit CEO
Small Banks
Business loan approval rates rose at regional and community banks. Small banks granted 49.8% of the funding requests they received in August, up one-tenth from July. It represents the highest figure for small banks since November 2014.
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"ahrefstartSBA loansahrefend are being made at a strong rate. With a robust economy and government guarantees that mitigate lender to risk, small banks are approving almost half of the loan requests they receive," Arora explained. "SBA financing is helping startups and growing companies to succeed."
Rohit Arora, Biz2Credit CEO
Institutional lenders
institutional lenders remained unchanged at an Index record 64.9%, up one-tenth of a percent from July's figure.
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"Institutional lenders (pension funds, insurance companies, and others), offer interest rates on par with big banks and longer payback periods. They are a good source of capital for small business owners,"
Rohit Arora, Biz2Credit CEO
Alternative lenders
Loan approval rates among alternative lenders rose to 56.6%, one-tenth of a percent higher than in the previous month.
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"Alternative lenders succeed because they are a source of quick capital when small business owners are in a pinch and cannot get a traditional bank loan,"
Rohit Arora, Biz2Credit CEO
Credit unions
Credit unions approved 40.2% of loan applications in August, a slight drop of one-tenth of a percent from July, according to the Biz2Credit Index.
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"Credit union lending for small businesses has been stagnant for the past several years,Their approval percentage today (40.2 percent) is a large drop from their all-time high of 57.9 percent in March 2012, six and a half years ago."
Rohit Arora, Biz2Credit CEO
View Past Months
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| December 2020 |
Biz2Credit Small Business Lending Index™ Reports Loan Approval Rates at Banks Declined in December 2020, Are Down More Than 50 Percent from One Year Ago |
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Approval percentages for all categories of lenders dropped more than 50% from December 2019 |
| View Report |
| November 2020 |
Biz2Credit Small Business Lending Index™ Reports Loan Approval Rates at Banks Declined in November 2020, Are Down More Than 50 Percent from One Year Ago |
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Approval percentages are down 50% or more for all categories of small business lenders as the pandemic surges |
| View Report |
| October 2020 |
Small Business Loan Approval Rates at Banks Declined in October 2020: Biz2Credit Small Business Lending Index™ |
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Small Businesses Capital Is Hard to Secure |
| View Report |
| September 2020 |
Small Business Loan Approval Rates at Banks Fell Again in September 2020: Biz2Credit Small Business Lending Index™ |
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Small Businesses in Limbo Awaiting PPP Loan Forgiveness |
| 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.