Small Business Loan Approval Percentages Hit New Heights at Big Banks and Institutional Lenders in December 2017, According to Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend
The calendar year 2017 was a strong one overall for small business lending
ahrefstartbusiness loanahrefend approval rates for big banks (25.2%) and institutional lenders (64.3%) hit new heights last month, according to the latest Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend (December 2017 figures). The monthly analysis examined more than 1,000 small business loan applications on Biz2Credit.com.
Big Banks
Small business loan approval rates at big banks 25.2% hit new heights last month.
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"The economy is performing well on many different levels. Holiday retail sales were up, unemployment remain low, and salaries have gone up a notch,".
Rohit Arora, Biz2Credit CEO
Small Banks
Small business loan approval rates climbed at larger institutions, such as banks and institutional lenders. Small banks approved 49% of the funding requests they received in December, the same percentage as in the month prior. For more than three years, regional and community banks have hovered at or around 49 percent, having last crossed over the half-way point in October 2014, when approvals were at 50.2 percent.
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"SBA lending was strong throughout 2017, and small banks are among the most active lending partners," added Arora, one of the country's leading experts in small business finance. "This bodes well as we enter a new year. It is helpful for young entrepreneurs, who might not have credit scores high enough for a traditional bank loan, that SBA-backed loans are available through big banks and smaller ones."
Rohit Arora, Biz2Credit CEO
Institutional lenders
loan approval rates in institutional lenders 64.3% hit new heights last month.
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"Businesses are anticipating that the tax form bill could help them, which gives potential borrowers more confidence to take risks. Meanwhile, lenders are closing deals and interest rates continue to trend upwards, which makes lending more profitable for them."
Rohit Arora, Biz2Credit CEO
Alternative lenders
Loan approval rates among alternative lenders in December dropped two-tenths of a percent to 56.7 percent after a small uptick in November. Approvals for the category declined every month except November, according to the Biz2Credit Index.
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"With many traditional lenders willing to fund small businesses, alternative lenders are getting requests from lower quality borrowers," . "The solid economy makes consumers willing to spend and results in business optimism - especially for companies looking to expand."
Rohit Arora, Biz2Credit CEO
Credit unions
Loan approval rates at credit unions climber one-tenth of a percent in December as they approved 40.4% of loan applications last month. Just two months ago, in October, credit unions had hit a record low point for the category.
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"Credit unions have a place in small business lending, but they have lost ground to banks both large and small and institutional lenders, who are have become aggressive in the small business lending marketplace," Arora added. "Banks and institutional lenders are reaping the benefits of incorporating financial technology (FinTech) into their operations. Credit unions lagged behind in technological upgrades, and it has hurt them over the past few years."
Rohit Arora, Biz2Credit CEO
View Past Months
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| April 2020 |
Small Business Loan Approval Rates Dropped to Record Lows in April 2020: Biz2Credit Small Business Lending Index™ |
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PPP Lending Dominates Small Business Lending, but Some Companies Applied for Non-CARES Act Funding |
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| March 2020 |
Small Business Loan Approval Rates Plummet in March 2020: Biz2Credit Small Business Lending Index™ |
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All Categories of small business lenders nosedive as coronavirus wreaks havoc on the economy |
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| February 2020 |
Small Business Loan Approval Rates at Big Banks Remain at Record High in February 2020: Biz2Credit Small Business Lending Index™ |
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Small Banks and Alternative Lenders drop, and Credit Unions remain at all-time low |
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| January 2020 |
Small Business Loan Approval Rates at Big Banks Reach New Record in January 2020: Biz2Credit Small Business Lending Index™ |
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Small banks drop slightly, while Credit Unions hit new bottom |
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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.