Lending Approval Rates at Big Banks, Institutional Lenders Continue to Surge, According to March 2015 Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend
Loan Approval Percentages at Small Banks, Alternative Lenders and Credit Unions Drop Again
Small business loan approval rates at big banks and institutional lenders continue to improve, attaining new post-recession highs in March 2015, according to the Biz2Credit Small Business Lending Index, the monthly analysis of 1,000 loan applications on Biz2Credit.com.
Big Banks
Big banks ($10 billion+ in assets) approved 21.6% of small business loan requests in March 2015, slightly up from 21.5% in February. Further, loan approval rates at big banks have increased each month for nearly a year.
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"Big banks continue to be strong in small business lending."
Rohit Arora, Biz2Credit CEO
"This is a reflection of overall strength of the economy, the confidence of small business owners, and the investments that big banks have made in their branding and technology."
Rohit Arora, Biz2Credit CEO
Small Banks
For the fourth consecutive month, small banks denied more than half of their loan requests to small business owners, as lending approval rates at small banks slipped from 49.6% in February to 49.5% in March. After reaching an all-time Index high in May 2014, lending approval rates at small banks have steadily declined for most of the past year.
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"Smaller banks have seen a gradual decline for nearly a year. They are losing market share to big banks and institutional lenders, which can offer attractive terms and quicker processing".
Rohit Arora, Biz2Credit CEO
Institutional lenders
Meanwhile, institutional lenders granted 60.9% of funding requests by small business owners in March, an increase from 60.7% in February 2015. Approval rates by institutional lenders have increased each month ever since Biz2Credit began monitoring this category of lenders one year ago.
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"Institutional lenders are willing to offer attractive loans to small business owners". "Our Biz2Credit platform enables them to buy small business loans as a solid investment with miniscule risk. Less than one percent of loans on our institutional platform have defaulted since January 2014."
Rohit Arora, Biz2Credit CEO
Alternative lenders
Approval rates at alternative lenders -- merchant cash advance companies, factors, and other non-bank institutions - dropped to 61.2% in March, from 61.4% in February. Alternative lenders' approval percentages have declined each month since January 2014, coinciding with the emergence of institutional lenders in the small business lending marketplace.
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"Alternative lenders have declined as institutional lenders have risen, and this trend shows no signs of letting up". "Entrepreneurs no longer have to pay high interest rates offered by alternative lenders. They can get money just as quickly from marketplace lenders at much lower rates. Bad news for alternative lenders, but good news for borrowers."
Rohit Arora, Biz2Credit CEO
Credit unions
Credit unions granted 43.1% of loan applications in March, a decrease from 43.3% in February 2015.
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"Credit unions peaked in 2012 in small business lending and have experienced a slow and steady decline nearly every month after that". "They never became the force in small business lending that they had hoped to become."
Rohit Arora, Biz2Credit CEO
View Past Months
Access Archives
| April 2020 |
Small Business Loan Approval Rates Dropped to Record Lows in April 2020: Biz2Credit Small Business Lending Index™ |
|
PPP Lending Dominates Small Business Lending, but Some Companies Applied for Non-CARES Act Funding |
| View Report |
| March 2020 |
Small Business Loan Approval Rates Plummet in March 2020: Biz2Credit Small Business Lending Index™ |
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All Categories of small business lenders nosedive as coronavirus wreaks havoc on the economy |
| View Report |
| February 2020 |
Small Business Loan Approval Rates at Big Banks Remain at Record High in February 2020: Biz2Credit Small Business Lending Index™ |
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Small Banks and Alternative Lenders drop, and Credit Unions remain at all-time low |
| View Report |
| January 2020 |
Small Business Loan Approval Rates at Big Banks Reach New Record in January 2020: Biz2Credit Small Business Lending Index™ |
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Small banks drop slightly, while Credit Unions hit new bottom |
| 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.