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August / 2021

Biz2Credit Small Business Lending Index™ for August Finds Loan Approval Rates Rise at Banks and at Non-Bank Lenders

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Big BanksImage
Banks with assets greater than $10 billion
Small business loan approval percentages at big banks ($10 billion+ in assets) jumped from 13.8% in July 2021 to 13.9% in August, up by three-tenths of a percentage from one year ago, according to the latest Biz2Credit Small Business Lending Index™ released today.

Total nonfarm payroll employment rose by 235,000 in August, and the unemployment rate declined by 0.2 percentage point to 5.2 percent, the Bureau of Labor Statistics reported on Friday, Sept. 3. Notable job gains occurred in leisure and hospitality, and in professional and business services, transportation and warehousing, private education, and manufacturing.

Many of these jobs are created by small businesses. Biz2Credit analyzed loan requests from companies in business more than two years with credit scores above 680. The results are based on primary data submitted by more than 1,000 small business owners who applied for funding on Biz2Credit's platform.

Monthly Comparison
+0.1%
13.9%
Aug 2021
13.8%
July 2021
Yearly Comparison
+0.3%
13.9%
Aug 2021
13.6%
Aug 2020
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“Small businesses are again borrowing to improve their cash flow and for growth,” said Biz2Credit CEO Rohit Arora, one of the nation’s leading experts in small business finance. “Approval percentages rose at both big banks and small banks.”

Rohit Arora
Biz2Credit CEO
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Small Banks Image
Banks with assets less than $10 billion
Small banks’ approvals also rose from 19.1% in July to 19.3% in August, according to the latest Biz2Credit Small Business Lending Index™ released today. The approval percentage at small banks is up eight-tenths of a percent from last year.
Monthly Comparison
+0.2%
19.3%
Aug 2021
19.1%
July 2021
Yearly Comparison
+0.8%
19.3%
Aug 2021
18.5%
Aug 2020
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Institutional Lenders Image
Investment groups or large investment portfolios such as insurance funds, mutual funds and hedge funds
Institutional lenders approved to 24.3% in August, up from 23.9% of funding requests in July and up 2.2 percentage points from one year ago.
Monthly Comparison
-0.4%
24.3%
Aug 2021
23.9%
July 2021
Yearly Comparison
+2.3%
24.3%
Aug 2021
22.0%
Aug 2020
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Alternative Lenders Image
Independent lending organizations not licensed as banks or credit unions
Alternative lenders approved rose almost a percent from 24.7% in July to 25.2% of funding applications in August 2021. Last year, the August percentage for alternative lenders was 23.0%.
Monthly Comparison
+0.5%
25.2%
Aug 2021
24.7%
July 2021
Yearly Comparison
+2.2%
25.2%
Aug 2021
23.0%
Aug 2020
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“Non-banks lenders continue to be a good source of capital for small business owners,” Arora said. “They typically focus less on FICO scores and more on the financial health of the borrowers who are applying for funding. This is especially true for institutional lenders and alternative lenders.”

Rohit Arora
Biz2Credit CEO
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Credit Unions Image
Non-profit money cooperatives whose members borrow from pooled deposits
Credit unions approved 20.5% in August, the same percentage as the two previous months, but down from 21.1% in August 2020.
Monthly Comparison
0%
20.5%
Aug 2021
20.5%
July 2021
Yearly Comparison
-0.6%
20.5%
Aug 2021
21.1%
Aug 2020

The Report

About Biz2Credit Small Business Lending Index™

The Biz2Credit Small Business Lending Index™ 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 Index™ 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.

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