Biz2Credit Small Business Lending Index for Dec. 2013 Reports Loan Approval Rates Hit All-time Index High at Big Banks and Alternative Lenders

Monthly Analysis Finds Decrease in Approval Rates at Small Banks as SBA Loans Stall

Big Banks

Big Banks

Small business loan approval rates at big banks ($10 billion+ in assets) increased to an all-time index high of 17.6% in December 2013 from 17.4% in November, according to the Biz2Credit Small Business Lending Index, a monthly analysis of 1,000 loan applications on Biz2Credit.com. Further, in a year-to-year comparison, lending approval rates at big banks have increased nearly 20 percent.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

"Increasingly, creditworthy borrowers are applying for small business loans at big banks and having them approved."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Economy

"Big banks, which request proof of three years of profitability, are now receiving applications from companies whose fortunes increased from 2011-2013. Borrowers are opting for non-SBA loans from big banks because these loans require less paperwork and generally are granted faster than SBA loans."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

Meanwhile, small business loan approvals at small banks dipped to 48.7% in December from 49.7% in November. Despite experiencing an uptick in loan approval rates in November, approvals at small banks have stalled, in part because of the backlog of ahrefstartSBA loan processingahrefend and because big banks are becoming more active in small business lending. In a year-to-year comparison small business lending approval rates at small banks are down by a slight margin of a little over 2 percent.

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

"Non-SBA business loans have gained in popularity over the last month. This, in turn, hurts smaller banks, which process a lot of SBA loans," explained Arora, one of the nation's leading experts on small business finance. "Less paperwork is involved in non-SBA applications, and the loans are typical processed 7 to 10 days quicker than SBA loans. Thus, non-SBA loans are more appealing to borrowers."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Alternative lenders continue to be a big player in small business lending. Approval rates by alternative lenders increased slightly to 67.3% in December 2013, which is an all-time index high, up from 67.2% in November.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"Alternative lenders picked up the slack from the SBA slowdown and are offering more lucrative terms to borrowers. Thus, borrowers are more willing to go to them for funding," Arora said. "More players continue to enter the marketplace, including yield-hungry investors such as insurance companies to get into the small business lending game. Technology savvy players who make the online loan application process quick and easy will continue to do well in 2014."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Meanwhile, credit unions, which had been on the lending rebound, experienced a decrease in approval rates in December. Approval rates at credit unions dropped to 43.9% from 44.5% in November. Further, lending approval rates by credit unions have declined in nine of the last twelve months and is down nearly 10 percent in a year-to-year comparison.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

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

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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

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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

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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.