Biz2Credit Small Business Lending Index™ for December Finds Loan Approval Rates Continue to Rise, But at Slow Pace

Approval Percentages at Big Banks, Small Banks, Institutional Lenders, Alternative Lenders and Credit Union Still Are Roughly Half of What They Were in December 2019

Small business leading

Biz2Credit Small Business Leading IndexTM

Biz2Credit Small Business Lending Index™ Reports Loan Approval Rates at Banks Roses in December 2021

Big Banks

Big Banks

Small business loan approval percentages at big banks ($10 + in assets) increased from 14.2% in November to 14.3% in December. Two years ago, bank approval percentages were about double what they are today. Big banks approved 28.2% of loan requests, while small banks approved 50.6% of loan requests in December 2019. Non-bank lender percentages in 2019 were even higher: institutional lenders approved nearly two-thirds (66.2%) of applications, alternative lenders granted 56.3%, and credit unions approved 39.7%. Total nonfarm payroll employment rose by 199,000 in December, and the unemployment rate declined to 3.9%, according to the Jobs Report released by the U.S. Bureau of Labor Statistics on Friday, Jan. 7, 2022. Employment continued to trend up in leisure and hospitality, in professional and business services, in manufacturing, in construction, and in transportation and warehousing, according to the report. Many of these jobs are created by small businesses. “Markets don’t like uncertainty, and with the pandemic taking unpredictable turns, uncertainty persists right now,” he continued. “Normalcy has not returned yet because the virus hasn’t allowed it. We thought with vaccination that COVID would lessen as a problem, but that didn’t happen. We didn’t expect the small business economy to stall for so long, and we certainly did not predict the inflation we are seeing.”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. To view the report for December 2021.

March 2020
15.4%
April 2020
8.9%

Monthly Comparison

April 2019
27.5%
April 2020
8.9%

Yearly Comparison

“Banks and most non-bank lenders alike saw their loan approval percentages rise in December, with the exception of credit unions,” said Rohit Arora, CEO of Biz2Credit, one of the nation’s leading experts in FinTech and small business lending. “Approval percentages are rising slower than expected. Loan approval rates remain far below pre-COVID approval levels of December 2019, just two years ago.”

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

Small banks’ approvals also rose from 19.9% in November to 20.1% in December, according to the latest Biz2Credit Small Business Lending Index™ released today.

March 2020
38.9%
April 2020
11.8%

Monthly Comparison

April 2019
49.8%
April 2020
11.8%

Yearly Comparison

Institutional lenders

Institutional lenders

Among several categories of non-bank lenders, approval percentages also climbed. Institutional lenders approved 24.9% of funding requests in December, up one-tenth of a percent from 24.8% in November.

March 2020
41.2%
April 2020
18.1%

Monthly Comparison

April 2019
65.3%
April 2020
18.1%

Yearly Comparison

Alternative lenders

Alternative lenders

Alternative lenders’ approval rates rose from 25.8% in November to 26.1% in December.

March 2020
30.4%
April 2020
15.2%

Monthly Comparison

April 2019
57.2%
April 2020
15.2%

Yearly Comparison

“After PPP, bank activity in small business lending has been slow. In 2022, however, with government lending programs ending and interest rates expected to rise, it will become more lucrative for banks to lend again. Activity should pick up this year,” Arora said.

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Credit unions approved 20.6% in December, the same percentage as in the previous two months.

March 2020
23.2%
April 2020
18.1%

Monthly Comparison

April 2019
40.1%
April 2020
18.1%

Yearly Comparison

Arora said that some types of businesses are doing well: IT, financial services, and anything that does not require a lot of human interfacing. Meanwhile, he said restaurants, hotels, entertainment venues, and the cruise industry are still struggling and will likely do so until the coronavirus gets under control.

Rohit Arora

Rohit Arora, Biz2Credit CEO

View Past Months

Access Archives

November 2021

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

Approval percentages at Big Banks, Small Banks, Institutional Lenders, Alternative Lenders rise; Credit Unions flat in November

View Report
October 2021

Biz2Credit Small Business Lending Index™ for October Finds Loan Approval Rates Rose at Banks and at Non-Bank Lenders for Sixth Straight Month

View Report
September 2021

Biz2Credit Small Business Lending Index™ for September Finds Loan Approval Rates Rise at Banks and at Non-Bank Lenders for Fifth Straight Month

View Report
August 2021

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

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.