Strong Economy Leads to Record High Small Business Loan Approval Percentages at Big Banks in July, According to The Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend

All categories of lenders to small businesses performed well in July 2018

ahrefstartSmall business loanahrefend approval rates for big banks reached another high point in July 2018, according to the Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend released today.

Big Banks

Big Banks

The July approval percentage for big banks (assets of $10 billion+) rose two-tenths of a percent from June's figure of 26.1% to 26.3%, according to Biz2Credit's monthly report, which examines more than 1,000 credit applications made by small businesses via the company's online lending platform.
Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

"The Fed rated the economy as strong this month, and the Jobs Report found that the economy keeps adding jobs in many sectors. In addition, there is optimism among small business owners. All of these factors create an atmosphere that is ripe for small business lending" "Business owners continue to invest in their firms and are finding success in securing capital, according to our latest figures."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Economy
On August 1, the Federal Reserve issued a statement that economic activity has risen at a strong rate. The Fed expects to continue gradual increases in the federal funds interest rate will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation near the central bank's 2 percent target.
Further, according to the August 3rd Jobs Report, unemployment for people who do not have a high school diploma dropped to 5.1 percent in July, the lowest figure since the Labor Department began reporting on this group of workers in 1992. The Jobs Report also stated that nonfarm employment increased by 157,000 in July and that professional and business services, manufacturing, healthcare and social assistance, added jobs during the month. Figures also rose for the food & beverage, hospitality, construction and healthcare services industries.

"Many of the new jobs now being filled have been created by small businesses". "Opportunities are abound for all workers, including workers who do not have high levels of education."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

Business loan approval rates rose at regional and community banks. Small banks granted 49.7% of the funding requests they received in July, up one-tenth from June. It represents the highest figure for small banks since December 2014. Banks reportedly eased important lending terms, including maximum loan size and the spread of loan rates over their cost of funds, for commercial real estate (CRE) loans, according to the Fed's latest updated ahrefstartSenior Loan Officer Opinion Surveyahrefend on Bank Lending Practices. Almost all banks that reportedly eased CRE credit policies pointed to aggressive competitors, including nonbank lenders, as a major reason for easing, according to the survey.
Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

"Small banks continue to approve SBA loan applications, which enable younger, growing companies to secure financing because government backing helps reduce lenders" exposure to risk". "Smaller banks are a good source of capital for startups and companies with less than stellar credit ratings." "Real estate entrepreneurs are looking for CRE loans for fix-and-flip projects that have become quite lucrative" . "These projects help upgrade neighborhoods and provide jobs in the construction industry, which is doing well in this economy."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

institutional lenders remained unchanged at an Index record 64.8%, the same as June's figure.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

"Institutional lenders (pension funds, insurance companies, and others), are an important and growing player in the small business credit marketplace". "They offer competitive interest rates and long repayment terms."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Loan approval rates among alternative lenders remained at 56.5 %, the same as the month prior.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"There will always be a demand for funding from non-bank lenders. They are willing to lend money to small businesses that do not qualify for traditional bank loans" . "Alternative lenders are a source of quick capital, but borrowers do pay high interest rates for the money."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Credit unions approved 40.3% of loan applications in July, the same as in June, according to the Biz2Credit Index.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

"Overall, July 2018 was a strong month for small business lending approvals across all categories of lenders."

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.