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

Big banks ($10 billion+ in assets) approved 23%of funding requests in March, up two tenths of a percent from February 2016.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

"Big banks continue to loosen the spigot and are allowing more of a free flow of capital to small business."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

Meanwhile, small banks granted 48.7% of funding requests last month, down two tenths of a percent from 48.9% in February.

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

"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

Rohit Arora, Biz2Credit CEO

Institutional lenders

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.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

"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

Rohit Arora, Biz2Credit CEO

Alternative lenders

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).

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"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

Rohit Arora, Biz2Credit CEO

Credit unions

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.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

"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

Rohit Arora, Biz2Credit CEO

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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.