Small Business Loan Approval Rates at Big Banks Remain at Record High in February 2020: Biz2Credit Small Business Lending Index™

Small Banks and Alternative Lenders drop, and Credit Unions remain at all-time low

Small business leading

Biz2Credit Small Business Leading IndexTM

Small Business Loan Approval Rates at Big Banks Remain at Record High in February 2020:

Big Banks

Big Banks

The approval percentage for small business loan applications at big banks ($10 billion+ in assets) stayed flat at 28.3% in February 2020, which remains post-recession record high, according to the Biz2Credit Small Business Lending Index™ released today.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

“Despite the Coronavirus scare during the month of February, small business lending was solid during the month,” said Biz2Credit CEO Rohit Arora, who oversees the monthly research. “We are likely to see the fallout from the spread of the virus in next month’s figures. Until very recently, the economy was chugging right along.”

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

The approval rate at small banks dipped one-tenth of a percent from 50.4% in January to 50.3% in February. According to the Bureau of Labor Statistics’ Jobs Report, nonfarm employment rose by 273,000 in February, while the unemployment rate was little changed at 3.5% last month. Notable job gains occurred in health care and social assistance, food services and drinking places, government, construction, professional and technical services, and financial activities. “February’s employment figures were better than expected. However, with the havoc caused by the Coronavirus, I suspect that the March figures will not be as rosy,” said Arora, one of the country’s leading experts in small business finance.

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

“As was the case in January, smaller banks are down slightly because they process more SBA loans, and the banks that make them want to see 2019 tax returns before making lending decisions,” Arora said.

Rohit Arora

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

Institutional lenders’ approval rates rose one-tenth of a percent from January’s figure of 66.4% to 66.5% in February 2020.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

“Institutional lenders continue to gain strength in small business lending. With attractive interest rates and longer terms than most other non-bank lenders, they are a fine source of capital for small businesses,” Arora said.

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Small business loan approval rates among alternative lenders dipped from 56.1% in January to 55.9% in February 2020.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

“Alternative lenders offer financing to businesses that banks often turn away,” Arora said. “For companies with mediocre or poor credit histories, they are a willing lender, which can be hard to find since such a high emphasis is placed on credit scores by traditional bank lenders.”

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

The approval percentage rate for credit unions remained at a record low of 39.6% in February.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

“I don’t see much movement from credit unions, which continue to struggle in the business credit marketplace. Those that do not upgrade their digital capabilities or partner with FinTech firms cannot expect to see their fortunes improve in today’s lending marketplace,” Arora said.

Rohit Arora

Rohit Arora, Biz2Credit CEO

View Past Months

Access Archives

January 2020

Small Business Loan Approval Rates at Big Banks Reach New Record in January 2020: Biz2Credit Small Business Lending Index™

Small banks drop slightly, while Credit Unions hit new bottom

View Report
December 2019

Banks’ Small Business Loan Approval Rates Hit Record High in December 2019: Biz2Credit Small Business Lending Index™

Improvement seen at big banks, small banks, and institutional investors

View Report
November 2019

Big Banks’ Small Business Loan Approvals Continue to Rise, Reach New Record High in November, According to Biz2Credit Small Business Lending Index™

Improvement seen in lending by big banks, small banks, and institutional investors in November

View Report
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

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.