Business Loan Approvals Increase Slightly in June: Biz2Credit Small Business Lending Index™
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Total nonfarm payroll employment increased by 209,000 in June, and the unemployment rate changed little at 3.6%, according to the Jobs Report released by the Bureau of Labor Statistics on Friday, July 7, 2023. Employment continued to trend up in government, health care, social assistance, and construction. Meanwhile, service industries, including restaurants, travel and tourism, and personal services are still struggling to find workers and have to pay higher wages to fill positions.
To determine its Small Business Lending Index, Biz2Credit analyzed loan requests from companies in operation for 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. To view the June 2023 Index, click here.
“While Fed tightening seems to be working still, the tight labor market will lead to further interest rate hikes and higher borrowing costs. This also increases the chances of the economy slipping into recession,” said Rohit Arora, CEO of Biz2Credit, and one of the nation’s leading experts in small business finance. “Although revenues are strong, wage costs remain high. There’s only so much a restaurant can charge for a burger or a salon can charge for a haircut and expect customers to keep coming back at the same frequency.”
“Companies that are looking to hire and train staff and purchase inventory but don’t have enough cash on hand are having a hard time securing capital at a reasonable cost right now,” added Arora.
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.