Small Business Financing at Big Banks and at Institutional Investors Finishes Strong in Landmark Year, According to December 2014 Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend

Loan Approval Rates Drop for Seventh Consecutive Month at Small Banks, Alternative Lenders and Credit Unions Also Stalled as 2014 Ended

Small business loan approval rates by big banks and institutional lenders reached post-recession highs in December 2014, according to the Biz2Credit Small Business Lending Index, a monthly analysis of 1,000 loan applications on Biz2Credit.com.

Big Banks

Big Banks

Big banks ($10 billion+ in assets) approved 21.1% of small business loan requests in December, which is up from 20.8% in November and marks back-to-back months of increases. Further, a year-to-year comparison shows that lending approval rates at big banks are up nearly 20 percent.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

"The higher percentage of loan approvals at big banks is good news for small business owners. However, big banks typically seek to grant loans of $500,000 or more and often prefer loans in excess of $2 million".

Rohit Arora

Rohit Arora, Biz2Credit CEO

Economy

"Many startups and young companies do not need that much money. Thus, big banks may not be the answer for these types of borrowers."

Economy

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

small banks are denying more than half of their loan requests. Further, lending approval rates by small banks dropped for the seventh month in a row as they approved 49.7% of loan requests from small business owners in December, which is slightly below November's mark of 49.8%. Despite the steady drops in lending approval rates at small banks, a year-to-year comparison shows that these loan approval rates are nearly identical to last year's numbers.

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 granted 60.1% of funding requests by small business owners in December, an increase from 59.9% in November. Approval rates by institutional lenders have increased each month since Biz2Credit began monitoring this category of lenders in January 2014.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

"Institutional lenders continue to be prominent factors in the small business finance game," "They are offering a wider variety of financial products that are more attractive to borrowers, including longer terms and lower interest rates than other non-bank alternative lenders." "Credit-worthy borrowers are increasingly opting to apply for loans at institutional lenders because of the simplicity of getting financing from these lenders and more attractive terms that are offered," "They are also approaching big banks, which enjoy better brand names and are getting the highest quality borrowers coming to them."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Approval rates at alternative lenders -- merchant cash advance companies, factors, and other non-bank institutions -- slipped for the 12th straight month to 61.8% in December, from 62% in November.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"Small business owners' financials have improved. Their performance is better and they are increasing their business credit scores. As a result they are not as desperate for money as they were during the recession when many alternative lenders could charge very high interest rates".

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Credit unions granted 43.3% of loan applications in December, a slight drop in the approval rate of 43.4% over the previous month as they continue to struggle making a bigger presence in the small business finance marketplace.

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

October 2019

Big Banks’ Small Business Loan Approvals Hit New Record in October, According to Biz2Credit Small Business Lending Index™

Strength seen in lending by big banks, small banks, and institutional investors last month

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September 2019

Small Business Loan Approvals at Big Banks Hit New Record in September, According to Biz2Credit Small Business Lending Index™

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Aug 2019

Small Business Loan Approvals at Banks Continue to Reach New Heights, According to August 2019 Biz2Credit Small Business Lending Index™

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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

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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.