Approval Rates at Big Banks, Institutional Lenders Hit New Highs, According to June 2015 Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend
Approval Percentages at Small Banks, Alternative Lenders and Credit Unions Stall
Small business loan approval rates at Big Banks and institutional lenders improved to new highs in June 2015, according to the Biz2Credit Small Business Lending Index, the monthly analysis of 1,000 loan applications on Biz2Credit.com.
Big Banks
Big Banks ($10 billion+ in assets) approved 22.19% of small business loan requests in June 2015, up from 21.9% in May, marking the eighth consecutive month that approval rates have increased for the largest banks.
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"Big Banks are increasingly adopting digitization. This makes them more efficient and is of benefit to borrowers, as well. These are the best numbers for big banks lending since the recession."
Rohit Arora, Biz2Credit CEO
Lending approval rates at small banks dropped two-tenths of a percent in June to 49.3% from 49.5% last month. For the eighth consecutive month, small banks have denied more than half of their loan requests.
Rohit Arora, Biz2Credit CEO
Small Banks
"Small banks need to start adapting to technology quickly. Otherwise they will continue losing market share to Big Banks and institutional lenders."
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"Their competitors make quicker decisions and get deals done. Meanwhile, they are not keeping pace. We have seen small banks falling behind in both the personal loans space and small business lending space during the past two and half years."
Rohit Arora, Biz2Credit CEO
Institutional lenders
Meanwhile, institutional lenders approved 61.4% of funding requests by small business owners in June, up from 61.3% in May. Lending approval rates at institutional lenders have surpassed those of alternative lenders, such as merchant cash advance companies, factors, and other non-bank lenders. Approval rates by institutional lenders have increased every month since January 2014 when Biz2Credit began monitoring this category.
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"Institutional lenders are offering more attractive loan packages to businesses on marketplace lending platforms, such as Biz2Credit's. As a result, they are making funding deals with more creditworthy borrowers."
Rohit Arora, Biz2Credit CEO
Alternative lenders
Approval rates at alternative lenders remained flat 61% in June, an Index-low. Alternative lenders' approval percentages have steadily declined since January 2014, coinciding with the emergence of institutional lenders in the small business lending marketplace.
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"Alternative lenders offer what I call 'desperate money' and right now, borrowers aren't desperate," "The financials of small business owners are pretty good and have been that way for the past couple of years."
Rohit Arora, Biz2Credit CEO
Credit unions
Credit unions approved 43.0% of loan applications in June, the same as in May 2015.
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"Credit unions continue to lag in small business lending because of they have not invested in technology and are still handcuffed by the MBL cap that allows them to lend only 12.25% of their total assets".
Rohit Arora, Biz2Credit CEO
View Past Months
Access Archives
| February 2021 |
Biz2Credit Small Business Lending Index™ Finds Loan Approval Rates in February 2021 Changed Little from January, But Dropped Dramatically from February 2020 |
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As Small Business Businesses Apply for PPP Funding, Approval Percentages for Traditional Loans Plummet |
| View Report |
| January 2021 |
Biz2Credit Small Business Lending Index™ Reports Loan Approval Rates at Banks Increased Slightly in January 2021, But Are Down More Than 50% from One Year Ago |
| View Report |
| December 2020 |
Biz2Credit Small Business Lending Index™ Reports Loan Approval Rates at Banks Declined in December 2020, Are Down More Than 50 Percent from One Year Ago |
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Approval percentages for all categories of lenders dropped more than 50% from December 2019 |
| View Report |
| 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 |
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.