Bank Lending to Small Companies Improved Dramatically in Feb. 2014; Biz2Credit Small Business Lending Index Reports Record High Loan Approval Rates at Banks

Credit Unions and Alternative Lenders Experience Decrease in Approvals as Banks Grant Increasing Numbers of Non-SBA Loans

Big Banks

Big Banks

Small business loan approval rates at big banks ($10 billion+ in assets) jumped to 19.1% in February 2014, up from 17.8% in January, according to the Biz2Credit Small Business Lending Index, a monthly analysis of 1,000 loan applications on Biz2Credit.com. In a year-to-year comparison, lending approval rates at big banks have increased more than 20 percent.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

"We continue to see that big banks are increasing their approvals of both SBA and non-SBA loans."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Economy

"Confidence in the economy and winter-stressed financials have encouraged businesses to be more bullish on applying for funds to invest in their companies."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

ahrefstartSmall business loan approvalsahrefend at small banks increased to 51.4% in February 2014, up from 50.9% in the previous month.

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

"Banks are starting to recognize the value of technology, especially with the online adoption of loan seekers." "They closed a lot of SBA loans in February."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

Institutional Lenders approved 56.6% of the funding requests they received in February, a slight increase from 56.5% in January, the first month that this category of the Biz2Credit Small Business Lending Index was measured. This category of lenders includes credit funds, insurance companies, family funds, and other yield-hungry, non-bank financial institutions that typically offer more competitively priced loan options than alternative lenders in amounts up to $1 million.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

"Institutional investors aggressively pursuing small business lending deals. They offer interest rates generally between the rates offered by banks (in the 6-8% range) and alternative lenders, which can charge 20-50%". "Pricing pressure on alternative lending has increased and fewer businesses are inclined to take high cost cash advances."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Alternative lenders had a slight decrease in approval rates to 63.9% in February from 64.1% in January 2014. Alternative lenders, which had been the biggest benefac"Small business loan approvalstors of the government shutdown last October, are starting to feel some competition from institutional lenders.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"Pricing pressure on alternative lending has increased, and fewer businesses are inclined to take high cost cash advances". "Some business owners don't realize how high the interest rates are from alternative lenders when they first secure the funding. If and when they can, small business owners pursue traditional bank loans at lower rates. This leaves the alternative lenders with poorer quality loan applicants, which is why their approval rates have declined."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Meanwhile, credit unions continue their slide in lending approvals. In February, small business loan approval rates at credit unions dipped from 43.4% in January to 43.3%, the lowest figure in since the Biz2Credit Index began at the start of 2011. Additionally, lending approval rates by credit unions has declined in 17 of the last 21 months and is down by nearly 25 percent during that period.

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

September 2019

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

View Report
Aug 2019

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

View Report
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

View Report
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

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.