Biz2Credit Small Business Lending Index™ Reports a Decrease in Loan Approval Rates at Banks and Credit Unions in February 2023
Nonfarm payroll employment rose by 311,000 in February, and the unemployment rate edged up to 3.6%, according to the Jobs Report released by the Bureau of Labor Statistics on Friday, March 10. Notable job gains occurred in leisure and hospitality, retail trade, government, and health care. Many of these jobs are created by small businesses.
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 February 2023 Index click here.
“February was not a great month for small business borrowers, and given the fallout from the collapse of Silicon Valley Bank (SVB), my fear is that it will be even harder for companies to secure capital,” said Rohit Arora, CEO of Biz2Credit, one of the nation’s leading experts in small business finance and fintech. “Lending at big banks, which are the most financially stable institutions, has stalled for months. Given what has happened of late, small banks are going to be cautious in lending. “There is a real danger that small businesses are about to experience a credit crunch.”
“Fed Chair Jerome Powell had signaled the likelihood of another hike in March, but that seems more difficult to do, given recent events,” Arora added. “The high cost of capital, combined with stingy lenders, is a bad combination for small business borrowers.”
About Biz2Credit Small Business Lending Index™
The Biz2Credit Small Business Lending Index™ 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 Index™ 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.