Small Business Loan Approval Rates Rebounded in June 2020: Biz2Credit Small Business Lending Index™
Improvement in Approvals for Companies Applying for Non-CARES Act Loans
Biz2Credit Small Business Leading IndexTM
Small Business Loan Approval Rates Rebounded in June 2020
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Big Banks
The approval percentage for small business loan applications at big banks ($10 billion+ in assets) rebounded from just 11.5% in May to 13.5% in June, according to the Biz2Credit Small Business Lending Index™ released today. The June 2020 figure is still far below the record high rate in February before the coronavirus pandemic became widespread. The figures do not reflect Payroll Protection Program (PPP) loan approval rates; PPP loan approvals are made by the government, rather than by the banks themselves.
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“Big banks, small banks, and all other categories of lenders saw their approval percentages rise in June, after a mixed May,” said Biz2Credit CEO Rohit Arora, who oversees the monthly research. “In the northeast, the economy is beginning to reopen, and here are hopeful signs. However, we will have to see how the spread of the pandemic impacts the south and west of the country. The coronavirus has made things tough for small businesses everywhere.”
Rohit Arora, Biz2Credit CEO
Small Banks
The approval rate at small banks climbed to 18.4% in June, up from 16.9% in May. In February 2020, small business loan approvals were a robust 50.3%.
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“Smaller banks are processing many PPP loan applications, and are still approving non-PPP requests,” Arora said. “Regional and community banks are playing a big part in the survival of small businesses.”
Rohit Arora, Biz2Credit CEO
Institutional lenders
Institutional lenders’ approval percentages increased to 21.6% in June, up from 21.4% in May.
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“Institutional lenders, like the other categories of lenders, have seen their approval percentages increase steadily in May and June, after disastrous results reported in March and April,” Arora said. “As the economy slowly emerges from the coronavirus lockdown, I foresee institutional lenders will again become important players in the small business lending marketplace.”
Rohit Arora, Biz2Credit CEO
Alternative lenders
Loan approval rates among alternative lenders jumped up to 23.4% in June, a substantial increase over May’s figure of 20.5%.
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“Some borrowers are seeking funding from alternative lenders because the turnaround time is so quick, and small business owners were desperate for cash,” Arora said. “Although they may not again reach pre-coronavirus levels, alternative lenders certainly play a role in small business lending.”
Rohit Arora, Biz2Credit CEO
Credit unions
Credit unions approved 21.35% of loan requests in June, up from just 21.2% in May 2020.
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Rohit Arora, Biz2Credit CEO
View Past Months
Access Archives
| 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 |
| October 2020 |
Small Business Loan Approval Rates at Banks Declined in October 2020: Biz2Credit Small Business Lending Index™ |
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Small Businesses Capital Is Hard to Secure |
| View Report |
| September 2020 |
Small Business Loan Approval Rates at Banks Fell Again in September 2020: Biz2Credit Small Business Lending Index™ |
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Small Businesses in Limbo Awaiting PPP Loan Forgiveness |
| View Report |
| August 2020 |
Small Business Loan Approval Rates at Banks Fell in August 2020: Biz2Credit Small Business Lending Index™ |
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Slight Declines in Approval Percentages at Alternative Lenders and Credit Unions |
| 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.