Small Business Loan Approval Percentages Hit New High Mark at Big Banks in January 2018, According to Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend

New Year starts strongly for small business lending as approval percentages and volume of loan requests increase

ahrefstartBusiness loanahrefend approval rates for big banks (25.3%) hit another new high last month, according to the latest Biz2Credit Small Business Lending Index TM (January 2018 figures). The monthly analysis examined more than 1,000 small business loan applications on Biz2Credit.com.

Big Banks

Big Banks

Big banks (assets of $10 billion+) are granting more than one-quarter of the small business loan applications they receive. The 25.3% approval percentage, up one-tenth of a percent from December, is yet another new benchmark for big banks.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

"Despite some recent bumps, the economy has done well during President Trump's first year in office, and tax cuts have also added to optimism among small business owners,"

Rohit Arora

Rohit Arora, Biz2Credit CEO

Economy

"With the economy showing such good signs, the number of small business owners applying for loans has risen. They are showing confidence and are willing to take risks."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

Small business loan approval rates climbed slightly at regional and community banks. Small banks approved 49.1% of the funding requests they received in January, up slightly from December. While they have flirted with the 50 percent mark since October 2014, small banks have not reached that benchmark since then.

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

"Small banks continue to be a reliable source for SBA loans," added Arora, one of the country's leading experts in small business finance. "The trend is continuing in the new year. SBA loans often are made to startups and businesses owned by entrepreneurs who might not yet have good credit ratings and don't qualify for traditional term loans from banks."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

institutional lenders Additionally, institutional lenders remained at an Index record 64.3%, the same as in December. These lenders (pension funds, insurance companies, and others), continue to be important players in small business lending.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

Alternative lenders

Alternative lenders

Loan approval rates among alternative lenders in January dropped one-tenth of a percent to 56.6%. Approvals have dipped slowly each month for almost two years, except for a small uptick in November 2017.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"Alternative lenders remain a source of funding for businesses that need money quickly or that have less than stellar credit histories," Arora explained. "With an economy ripe for entrepreneurship, borrowers at various levels of creditworthiness continue to apply for credit. Often, companies that cannot find funding from banks are able to securing financing from alternative (non-bank) lenders."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Credit unions approved 40.3% of loan applications in January, a one-tenth of a percent drop from December.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

"While there is a continuing push to raise the lending cap limit for credit unions, they have not been successful. Meanwhile, banks, institutional lenders and alternative lenders, which have used financial technology to their advantage, have taken market share from them," Arora added. "I don't see this trend changing anytime soon, unless the cap is raised and investment in technology occurs."

Rohit Arora

Rohit Arora, Biz2Credit CEO

View Past Months

Access Archives

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

View Report
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

View Report
April 2019

Small Business Loan Approvals at Banks Jumped Again in April Biz2Credit Small Business Lending IndexTM

Credit Union Lending Remains at Post-Recession Low

View Report
March 2019

Small Business Loan Approvals at Big Banks Hit New High: Biz2Credit Small Business Lending IndexTM

Credit Union Lending Percentages Drop to Historic, Post-Recession 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.