Small Biz Lending Approval Rates Surge at Big Banks, Institutional Investors: Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend

Lending at Alternative Lenders Continues to Falter; Credit Union Loan Approval Rates Remain Stagnant

Loan approval rates at big banks ($10 billion+ in assets) improved to new post-recession highs in February 2017, according to the latest Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend,the monthly analysis of more than 1,000 small business loan applications on Biz2Credit.com. Small banks and institutional investors also experienced an uptick in their loan approval rates in an overall favorable month for small business lending. Meanwhile, loan approval rates at credit unions remained stagnant and approval rates at alternative lenders dropped.

Big Banks

Big Banks

Small business loan approval rates at big banks improved to 24.1% in February 2017, marking the seventh consecutive month of increases and the 11th time in a calendar year that approval percentages have increased. Further, loan approval rates at big banks in a year-to-year comparison are up more than one full percentage point, as they slowly creep towards the one-quarter mark.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

"There is a confidence in the economy right now, and that is translating to higher loan approval rates at mainstream lending institutions."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Economy

"Small business owners are optimistic that there are bright days ahead and are applying for capital to invest in growing their businesses."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

For the first time in the last six months, loan approval rates at small banks dropped by one-tenth of a percent to 48.8% in February 2017 from 48.9% in January. The approval rates at small banks dropped below 50% two and a half years ago and have struggled to reach the mark again.

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

"Although small banks dipped slightly in their loan approval percentage last month, there is some room for optimism", one of the nation's leading experts in small business finance. "President Trump has prioritized reforming the Dodd Frank legislature to scale back regulations for community banking institutions. His administration is aggressively working towards reducing the burdensome bill to small banks, which will allow them to lend more freely."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

Institutional lenders' loan approval rates improved to 63.5%, reaching a new Index high. It was the second time in the last three months that this category of lenders had an uptick in their loan approval rates.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

"The stock market and U.S. dollar are very strong and this is attracting a high volume of investors from various parts of the world". "Small business lending is still one of the most profitable sectors to invest in and we are seeing a number of yield-hungry investors getting involved in this space of loans."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Loan approval rates dropped at alternative lenders in February, as they approved 58.4% of the loan requests they received, down one-tenth of a percent from 58.5% in January.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"Alternative lenders have struggled to adjust to its industry competition, which have caught up to the one advantage they once held - speed of processing loan requests". "The advancements in technology at big banks and institutional lenders have led to quicker, more efficient loan approvals. Investments in technology enable these big lending institutions to offer affordable loan products as they significantly mitigate risk."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Loan approval rates at credit unions remained stagnant at 40.8%, the low mark for this category of lenders.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

"Credit unions have become an afterthought for small business borrowers". "Competitors are taking market share away from credit unions, which are frequently left with less creditworthy borrowers."

Rohit Arora

Rohit Arora, Biz2Credit CEO

View Past Months

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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

View Report
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

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.