Loan Approvals at Banks and Institutional Lenders Increase Slightly, While Small Banks and Credit Unions Dip, According to Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend for February 2016
Loan approval rates at both big banks and institutional lenders improved slightly in February 2016, according to the Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend, the monthly analysis of more than 1,000 small business loan applications on Biz2Credit.com. Once again, loan approval percentages at small banks dipped slightly, while credit unions fell to an all-time Index low.
Big Banks
Lending approval rates at big banks ($10 billion+ in assets) increased slightly as they approved 22.8% of funding requests in February, up just one tenth of a percent from January 2016.
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"The stock market is still relatively volatile, and there is uncertainty in the marketplace for lenders."

Rohit Arora, Biz2Credit CEO

"The stock market is still relatively volatile, and there is uncertainty in the marketplace for lenders."

Rohit Arora, Biz2Credit CEO
Small Banks
Approval percentages at small banks dropped slightly to 48.9% in February from 49% the previous month.
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Institutional lenders
Lending approval rates at institutional lenders saw a slight uptick in February, improving to 62.7% from 62.6% in January. Since Biz2Credit started following this category of lenders in 2014, institutional lenders have yet to experience a setback month.
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"Institutional lenders continue to make an impact in small business lending." "We expect to see more international funds enter the marketplace in search of higher yields -- especially with growing uncertainty in global emerging markets."

Rohit Arora, Biz2Credit CEO
Alternative lenders
Loan approval rates among alternative lenders rose to 56.6%, one-tenth of a percent higher than in the previous month.Loan approval rates at alternative lenders remained at 60.8% in February, tying the all-time low set in January. Approval percentages for alternative lenders have gradually declined since January 2014. This trend coincides with the emergence of institutional lenders in the small business lending marketplace.
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"Alternative lenders typically offer loan products at high interest rates. The businesses that resort to borrowing money from them often have low credit scores and thus have fewer options."

Rohit Arora, Biz2Credit CEO
Credit unions
Credit unions approved 42.1% of loan applications in February, down slightly from 42.2% in January. February's figure is yet another Index low for credit union approval.
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"Credit unions are not doing much to improve their small business lending, namely investing in technology," said Arora. "Credit unions face challenges in competing for credit-worthy borrowers."

Rohit Arora, Biz2Credit CEO
View Past Months
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November 2020 |
Biz2Credit Small Business Lending Index™ Reports Loan Approval Rates at Banks Declined in November 2020, Are Down More Than 50 Percent from One Year Ago |
Approval percentages are down 50% or more for all categories of small business lenders as the pandemic surges |
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October 2020 |
Small Business Loan Approval Rates at Banks Declined in October 2020: Biz2Credit Small Business Lending Index™ |
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September 2020 |
Small Business Loan Approval Rates at Banks Fell Again in September 2020: Biz2Credit Small Business Lending Index™ |
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August 2020 |
Small Business Loan Approval Rates at Banks Fell in August 2020: Biz2Credit Small Business Lending Index™ |
Slight Declines in Approval Percentages at Alternative Lenders and Credit Unions |
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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.