Small Biz Loan Approval Rates Improve to New All-Time Highs at Big Banks, According to Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend
Lending at Small Banks, Institutional Investors Remains Stagnant as Credit Unions Continue to Falter
Loan approval rates at big banks ($10 billion+ in assets) picked up where they left off in 2016, improving to post-recession highs in January 2017, according to the Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend, the monthly analysis of more than 1,000 small business loan applications on Biz2Credit.com. Alternative lenders also experienced an uptick in their loan approval rates in the last month. Additionally, loan approval rates at small banks and institutional investors remained stagnant while approval rates at credit unions dropped.
Big Banks
Small business loan approval rates at big banks improved to 24% in January 2017, marking the sixth consecutive month of increases for this category of lenders. Further, loan approval rates at big banks in a year-to-year comparison are up more than a full percentage point as it slowly creeps towards the one-quarter mark of approvals.
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"Despite political turmoil, the market has responded fairly well since Donald Trump took over the White House. He has brought a business friendly approach."
Rohit Arora, Biz2Credit CEO
"There is still a sense of optimism, especially in the banking sector, because of the prospect that Dodd Frank restrictions might be eased."
Rohit Arora, Biz2Credit CEO
Small Banks
Loan approval rates at small banks remained stagnant at 48.9% and are near mirror images of its 49% mark in a year-to-year comparison. Although the rates didn't increase, January 2017 marked the fourth consecutive month that the category of lenders avoided a decrease.
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"Dodd-Frank rules had a significant impact on small banks", one of the nation's leading experts in small business finance. "If the regulations are reduced, it could help spur lending by regional and community banks."
Rohit Arora, Biz2Credit CEO
Institutional lenders
In addition, institutional lenders' loan approval rates remained at 63.4%. This ended a six-month streak of increases for this category of lenders.
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"The Dow Jones crossed the milestone mark of 20,000 and optimism to invest in the U.S. is as strong as it has been for a while". "I anticipate global institutional lenders will continue to seek high yields from investments in American small business loans."
Rohit Arora, Biz2Credit CEO
Alternative lenders
Loan approval rates bounced back considerably at alternative lenders in January, as they approved 58.5% of the funding requests they received, down one-tenth of a percent in a month-to-month comparison. In December 2016, alternative lending approval rates dropped by six-tenths of a percent.
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"Advancements in technology by mainstream lenders has taken away the competitive advantage of processing loans quickly that alternative lenders long held". "Once-thriving alternative lenders such as CAN Capital have stopped lending, and smaller alternative lending companies are going out of business. We will see more of consolidation in this category during 2017."
Rohit Arora, Biz2Credit CEO
Credit unions
Loan approval rates at credit unions dropped to a new Index low of 40.8% in January.
Monthly Comparison
Yearly Comparison
"Credit unions are hoping that the MBL lending cap could go up with a new regime in Washington". "Otherwise, credit union lending to small businesses will likely remain stagnant."
Rohit Arora, Biz2Credit CEO
View Past Months
Access Archives
| 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 |
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Approval percentages are down 50% or more for all categories of small business lenders as the pandemic surges |
| View Report |
| October 2020 |
Small Business Loan Approval Rates at Banks Declined in October 2020: Biz2Credit Small Business Lending Index™ |
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Small Businesses Capital Is Hard to Secure |
| View Report |
| September 2020 |
Small Business Loan Approval Rates at Banks Fell Again in September 2020: Biz2Credit Small Business Lending Index™ |
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Small Businesses in Limbo Awaiting PPP Loan Forgiveness |
| View Report |
| August 2020 |
Small Business Loan Approval Rates at Banks Fell in August 2020: Biz2Credit Small Business Lending Index™ |
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Slight Declines in Approval Percentages at Alternative Lenders and Credit Unions |
| 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.