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June / 2021

Biz2Credit Small Business Lending Index™ Finds June 2021 Loan Approval Rates Increased for All Categories of Lenders

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Big BanksImage
Banks with assets greater than $10 billion
Small business loan approval percentages at big banks ($10 billion+ in assets) climbed slightly from 13.5% in May to 13.6% in June 2021 , according to the latest Biz2Credit Small Business Lending Index™ released today.

Total Nonfarm Payroll employment rose by 850,000 in June, and the unemployment rate rose by one-tenth of a percentage point to 5.9%, the U.S. Bureau of Labor Statistics reported on Friday, July 2. Notable job gains occurred in leisure and hospitality, public and private education, professional and business services, retail trade, and other services. 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.

Monthly Comparison
+0.1%
13.6%
June 2021
13.5%
May 2021
Yearly Comparison
+0.1%
13.6%
June 2021
13.5%
June 2020
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“Banks are looking to increase their SBA 7(a) loan-making, as they found out that the small business lending sector can be lucrative. Many lenders earned millions in processing fees for processing Paycheck Protection Program (PPP) loans in the past year,” said Biz2Credit CEO Rohit Arora, one of the nation’s leading experts in small business finance.

Rohit Arora
Biz2Credit CEO
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Small Banks Image
Banks with assets less than $10 billion
Small banks’ approvals also rose from 18.7% in May to 18.9% in June.
Monthly Comparison
+0.2%
18.9%
June 2021
18.7%
May 2021
Yearly Comparison
+0.5%
18.9%
June 2021
18.4%
June 2020
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Institutional Lenders Image
Investment groups or large investment portfolios such as insurance funds, mutual funds and hedge funds
Institutional lenders approved 23.8% of funding requests in June, up two-tenths of a percent from 23.6% in May.
Monthly Comparison
+0.2%
23.8%
June 2021
23.6%
May 2021
Yearly Comparison
+2.2%
23.8%
June 2021
21.6%
June 2020
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Alternative Lenders Image
Independent lending organizations not licensed as banks or credit unions
Alternative lenders approved 24.5% of funding applications in June 2021, up from 24.3% the month prior.
Monthly Comparison
+0.2%
24.5%
June 2021
24.3%
May 2021
Yearly Comparison
+0.1%
24.5%
June 2021
24.4%
June 2020
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“Small business owners need capital both to rebound and to grow,” Arora said. “They have taken off their blinders and look for alternative to the big name banks. They can get funding from many different sources, and capital seems to be flowing again, but we are not anywhere near we were before the pandemic. Still, we are seeing encouraging trends.”

Rohit Arora
Biz2Credit CEO
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Credit Unions Image
Non-profit money cooperatives whose members borrow from pooled deposits
Credit unions edged up from a 20.4% approval rate in May, to 20.5% in June 2021.
Monthly Comparison
+0.1%
20.5%
June 2021
20.4%
May 2021
Yearly Comparison
-0.85%
20.5%
June 2021
21.35%
June 2020

The Report

About Biz2Credit Small Business Lending Index™

The Biz2Credit Small Business Lending Index™ 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 Index™ 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.

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