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

Small business leading

Biz2Credit Small Business Leading IndexTM

Small Business Loan Approval Rates Rebounded in June 2020

Big Banks

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.

March 2020
15.4%
April 2020
8.9%

Monthly Comparison

April 2019
27.5%
April 2020
8.9%

Yearly Comparison

“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

Rohit Arora, Biz2Credit CEO

Small Banks

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%.

March 2020
38.9%
April 2020
11.8%

Monthly Comparison

April 2019
49.8%
April 2020
11.8%

Yearly Comparison

“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

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

Institutional lenders’ approval percentages increased to 21.6% in June, up from 21.4% in May.

March 2020
41.2%
April 2020
18.1%

Monthly Comparison

April 2019
65.3%
April 2020
18.1%

Yearly Comparison

“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

Rohit Arora, Biz2Credit CEO

Alternative lenders

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%.

March 2020
30.4%
April 2020
15.2%

Monthly Comparison

April 2019
57.2%
April 2020
15.2%

Yearly Comparison

“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

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Credit unions approved 21.35% of loan requests in June, up from just 21.2% in May 2020.

March 2020
23.2%
April 2020
18.1%

Monthly Comparison

April 2019
40.1%
April 2020
18.1%

Yearly Comparison

Rohit Arora

Rohit Arora, Biz2Credit CEO

View Past Months

Access Archives

August 2020

Small Business Loan Approval Rates at Banks Fell in August 2020: Biz2Credit Small Business Lending Index™

Slight Declines in Approval Percentages at Alternative Lenders and Credit Unions

View Report
July 2020

Small Business Loan Approval Rates at Banks Rose in July 2020: Biz2Credit Small Business Lending Index™

Improvement in Approval Percentages at Banks and Institutional Lenders for Companies Applying for Non-PPP Loans, While Alternative Lenders and Credit Unions Slip

View Report
June 2020

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

View Report
May 2020

Small Business Loan Approval Rates Rebounded in May 2020: Biz2Credit Small Business Lending Index™

Improvement in Approvals for Companies Applying for Non-CARES Act Loans

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.