Small Business Loan Approvals at Big Banks Hit Record Highs, According to June 2019 Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend

Big Banks, Regional and Community Banks, and Institutional Lenders Climb, While Alternative Lending Drops and Credit Unions Sink to New Low

Big Banks

Big Banks

Approval rates for small business loan applications inched up to yet another record high of 27.6% at big banks ($10 billion+ in assets) in June.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

“Small business lending is thriving this year at big banks, as well as at regional and community banks. Currently, access to capital is quite good for small business owners who are looking to grow their enterprises,” said Biz2Credit CEO Rohit Arora, who oversees the monthly research derived from more than 1,000 small business credit applications on his company’s online lending platform. “In a strong economy such as this one, entrepreneurs with a solid record of payment are likely to get the financing they need for working capital and future growth needs.”

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

Small bank approvals of small business loan applications climbed one-tenth of a percent from 49.9% in May to 50% in June. Meanwhile, the Labor Department's Jobs Report released on July 5, reported that employment nonfarm payroll employment increased by 224,000 in June, while the unemployment rate was little changed at 3.7 percent. The U.S. Bureau of Labor Statistics noted that significant job gains occurred in professional and business services, health care, transportation, and warehousing. The NFIB Small Business Optimism Index increased in May, the most recent month reported by the NFIB, to a new record high. Capital spending plans increased along with actual outlays. Small business owners’ expectations for sales, business conditions, and expansion all rose. "Optimism among small business owners has surged back to historically high levels, thanks to strong hiring, investment, and sales,” said NFIB President and CEO Juanita D. Duggan. “The small business half of the economy is leading the way, taking advantage of lower taxes and fewer regulations, and reinvesting in their businesses, their employees, and the economy as a whole."

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

“Half of the applicants who go to small banks for funding are getting the money they need. The widespread availability of SBA loans at regional and community banks plays an important role,” Arora explained.

Rohit Arora

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

Institutional lenders’ approval rates climbed to 65.6%, up one-tenth of a percent from May’s figure of 65.5%.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

“Institutional lenders are playing an increasingly important role in small business financing,” Arora said.

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Small business loan approval rates among alternative lenders dropped one-tenth of a percent to 57.0% in June, down a notch from 57.1% in May.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

“The resurgence of banks in small business lending has stifled alternative lenders,” Arora said. “High quality borrowers get better interest rates and terms from banks. However, alternative lenders are a viable source of funding for people who need money quickly or who have a less than stellar track record of paying back their debts. Alternative lenders often provide funding to businesses that the banks reject.”

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Credit unions dropped one-tenth of a percent to a record low 40.0% loan approvals in June.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

“While credit unions are increasingly partnering with the SBA on small business loans, the moves are not yet making a big impact,” said Arora, who oversees the Biz2Credit research. “Credit unions are still hurt by the Member Business Lending cap, which limits their loan approvals to 12.25% of their assets, and by the fact that many of them have not digitized the small business loan application process.”

Rohit Arora

Rohit Arora, Biz2Credit CEO

View Past Months

Access Archives

October 2019

Big Banks’ Small Business Loan Approvals Hit New Record in October, According to Biz2Credit Small Business Lending Index™

Strength seen in lending by big banks, small banks, and institutional investors last month

View Report
September 2019

Small Business Loan Approvals at Big Banks Hit New Record in September, According to Biz2Credit Small Business Lending Index™

View Report
Aug 2019

Small Business Loan Approvals at Banks Continue to Reach New Heights, According to August 2019 Biz2Credit Small Business Lending Index™

View Report
July 2019

Small Business Loan Approvals at Banks Hit Record Highs, According to July 2019 Biz2Credit Small Business Lending IndexTM

Alternative Lending Drops and Credit Unions Sink to a Record 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.