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July/2022

Biz2Credit Small Business Lending Index™ Finds Business Loan Approval Rates Rose at Small Banks, Dipped at Big Banks in July 2022

Loan approval percentages down slightly at big banks and credit unions, but non-bank lenders show continued growth
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Big BanksImage
Banks with assets greater than $10 billion
Big Banks ($10m + in assets) dipped from 15.4% in June to 15.3% in July, according to the latest Biz2Credit Small Business Lending Index™ released today.

Total nonfarm payroll employment rose by 528,000 in July, and the unemployment rate edged down to 3.5%, according to the Jobs Report released by the U.S. Bureau of Labor Statistics released on Friday, August 5, 2022. Job growth was widespread, led by gains in leisure and hospitality, professional and business services, and health care. Both total nonfarm employment and the unemployment rate have returned to their February 2020 pre-pandemic levels. 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 report for July 2022.

Monthly Comparison
-0.1%
15.3%
July 2022
15.4%
June 2022
Yearly Comparison
+1.5%
15.3%
July 2022
13.8%
July 2021
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"Approvals at big banks slipped just a bit after months of steady increases. This is likely due to concerns about a possible recession after the Federal Reserve rose interest rates by 75 basis points in an effort to control inflation,” said Biz2Credit CEO Rohit Arora, one of the nation’s leading experts in small business lending and fintech.

Rohit Arora
Biz2Credit CEO
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Small Banks Image
Banks with assets less than $10 billion
Small Banks rose from 21.1% in June to 21.2% in July.
Monthly Comparison
+0.1%
21.2%
July 2022
21.1%
June 2022
Yearly Comparison
+2.1%
21.2%
July 2022
19.1%
July 2021
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“Small banks, which process a lot of SBA loans, remain a good source of capital. For companies that need money more quickly, nonbank lenders remain a good option.”

“Small business lending at credit unions continues to flounder,” added Arora. “Fortunately, their approval percentages are roughly half of what they were just before the pandemic and have shown little growth this year.”

Rohit Arora
Biz2Credit CEO
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Institutional Lenders Image
Investment groups or large investment portfolios such as insurance funds, mutual funds and hedge funds
Institutional lenders approved 25.8% of loan requests in July, up from 25.6% in June. Approvals in this lending category have climbed consistently in 2022.
Monthly Comparison
+0.2%
25.8%
July 2022
25.6%
June 2022
Yearly Comparison
+1.9%
25.8%
July 2022
23.9%
July 2021
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Alternative Lenders Image
Independent lending organizations not licensed as banks or credit unions
Alternative lenders’ approval rates rose from 27.1% in June to 27.2% in July.
Monthly Comparison
+0.1%
27.2%
July 2022
27.1%
June 2022
Yearly Comparison
+2.5%
27.2%
July 2022
24.7%
July 2021
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“Small business owners continue to face challenges in finding workers. The demand for labor is driving up wages, which impacts the bottom line for many small companies. Labor costs are usually a company’s largest expense,” Arora says. “Meanwhile, inflation remains high and puts a financial crunch on small business owners.”

Rohit Arora
Biz2Credit CEO
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Credit Unions Image
Arora says the lending industry is watching closely what the SBA does, specifically whether the agency will approve fintech companies to process SBA loans.
Credit unions dropped from 20.5% in June to 20.4% in July.
Monthly Comparison
-0.1%
20.4%
July 2022
20.5%
June 2022
Yearly Comparison
-0.1%
20.4%
July 2022
20.5%
July 2021

The Report

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.

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