Biz2Credit Small Business Lending Index for Jan. 2014 Reports New High Approval Rates at Big and Small Banks

Institutional Lenders, a New Category of the Biz2Credit Index, Increasingly Seeking Small Business Lending Deals

Big Banks

Big Banks

Small business loan approval rates at big banks ($10 billion+ in assets) increased to a new high of 17.8% in January 2014, up from 17.6% in December 2013, 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 15 percent.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

"Increasingly, creditworthy borrowers are applying for small business loans at big banks and having them approved". "Big banks, which request proof of three years of profitability, are now receiving applications from companies whose fortunes increased from 2011- 2013."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

Small business loan approvals at small banks reached a new benchmark of 50.9% in January 2014, up from 48.7% in the previous month. While lending approval rates at small banks are up by 2 percent in a year- to- year comparison.

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

"SBA lending has picked up considerably over the last month," said Biz2Credit CEO Rohit Arora, who oversaw the research. "The increase in popularity over the last month in SBA lending accounts for the rise in approval rates at small banks, which rely heavily on the SBA Express program (loans less than $350,000) and SBA 7(a) program (loans between $350,000 - $5 million)."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

Institutional Lenders, a new category in the Biz2Credit Small Business Lending Index, approved 56.5% of the funding requests they received. 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 have emerged in small business lending and offer interest rates that generally fall somewhere between the rates offered by banks (around 6%) and alternative lenders that charge up to 30-50%". "As more institutional lenders come into the marketplace, it provides greater amounts of long-term, stable money to the marketplace. Borrowers can get better products at attractive interest rates and terms."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Alternative lenders,which emerged as important players in small business lending in 2013, experienced a drop-off in approval rates from 67.3% in December to 64.1% in January 2014. Alternative lenders had been the biggest benefactors of the government shutdown last October.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"What we may be seeing is a return to normalcy for alternative lenders. While they offer speed in their decision-making, alternative lenders charge higher rates than others". "As banks have become more aggressive in small business lending, the higher quality borrowers seem to be going to them."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Meanwhile, credit unions experienced a drop in small business approval rates in January, thereby continuing their slide. Approval rates at credit unions dipped to an all- time low of 43.4% in January from 43.9% in November. Further, lending approval rates by credit unions has declined in 16 of the last 20 months and is down nearly 25 percent in that 20- month period.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

"The demand for short-term, high-interest financing will go down, and institutional lenders will fill that void."

Rohit Arora

Rohit Arora, Biz2Credit CEO

View Past Months

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Aug 2019

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

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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

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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

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May 2019

Small Business Loan Approvals at Big Banks Stay at Record Post-Recession High, According to May 2019 Biz2Credit Small Business Lending IndexTM

Small Banks and Institutional Lenders Climb, Credit Union Lending Remains at Post-Recession Low, Alternative Lending Stalls Again

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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.