Loan Approvals at Big Banks Continue to Climb, Hit New Post-Recession High and Institutional Lenders Increase Slightly, Dip at Small Banks and Credit Unions, According to Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend for March 2016
Loan approval rates at big banks and institutional lenders hit new highs in March 2016, according to the latest Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend, the monthly analysis of more than 1,000 small business loan applications on Biz2Credit.com. Approval percentages dipped slightly for small banks, credit unions, and alternative lenders.
Big Banks
Big banks ($10 billion+ in assets) approved 23%of funding requests in March, up two tenths of a percent from February 2016.
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"Big banks continue to loosen the spigot and are allowing more of a free flow of capital to small business."
Rohit Arora, Biz2Credit CEO
Small Banks
Meanwhile, small banks granted 48.7% of funding requests last month, down two tenths of a percent from 48.9% in February.
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"who oversaw the research. "Small banks were down slightly, but I expect that to change. Small banks are frequently pushing SBA loans, which mitigate their risk, but require a lot of documentation. After companies make their 2015 tax filings, look for small banks' loan approval percentages to go up."
Rohit Arora, Biz2Credit CEO
Institutional lenders
Institutional lenders again had a slight uptick in March, improving to 62.8% from 62.7% in February. This category of lender continues to show strength in the small business credit marketplace every month . since Biz2Credit started following it in 2014.
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"Institutional lenders are indeed a driving force, and I don't see that changing anytime soon". "International funds are getting into the marketplace. Because the yields in small business lending are attractive, increasing numbers of institutional lenders are getting into the game."
Rohit Arora, Biz2Credit CEO
Alternative lenders
Loan approval rates at alternative lenders in March dipped to 60.7% from 60.8% in February. The emergence of institutional lenders in the small business lending marketplace has hurt alternative lenders (merchant cash advance companies, factors, and other non-bank lenders).
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"Alternative lenders' financial products are offered at high interest rates. With so much competition in the marketplace, borrowers are shopping for less expensive sources of capital". "Speed of decision-making has long been an asset for alternative lenders. However, banks and institutional lenders are investing in technology and are also making swift decisions -- and their loans come at lower rates than those of alternative lenders."
Rohit Arora, Biz2Credit CEO
Credit unions
Credit unions approved 42% of loan applications in March, down slightly from 42.1% in February. This figure sets a new low for the category, according to the Index, which launched in January 2011.
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"Credit unions continue to slip as players in small business lending". "This downward trend have gone on for quite a while. They simply cannot compete for quality, credit-worthy borrowers."
Rohit Arora, Biz2Credit CEO
View Past Months
Access Archives
| February 2021 |
Biz2Credit Small Business Lending Index™ Finds Loan Approval Rates in February 2021 Changed Little from January, But Dropped Dramatically from February 2020 |
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As Small Business Businesses Apply for PPP Funding, Approval Percentages for Traditional Loans Plummet |
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| January 2021 |
Biz2Credit Small Business Lending Index™ Reports Loan Approval Rates at Banks Increased Slightly in January 2021, But Are Down More Than 50% from One Year Ago |
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| December 2020 |
Biz2Credit Small Business Lending Index™ Reports Loan Approval Rates at Banks Declined in December 2020, Are Down More Than 50 Percent from One Year Ago |
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Approval percentages for all categories of lenders dropped more than 50% from December 2019 |
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| 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 |
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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.