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