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March / 2021

Biz2Credit Small Business Lending Index™ Finds March 2021 Non-PPP Loan Approval Rates Trending Upwards for All Categories of Lenders

PPP Lending Still Dominates Small Business Loan-Making in March 2021
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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) rose slightly to 13.5% in March from 13.3% in February 2021, according to the latest Biz2Credit Small Business Lending Index™ released today.

In comparison, one year ago in March 2020, big banks approved 15.4% of the funding requests they received. Biz2Credit, which has been the leading processor of PPP applications in the country since mid-January, finds that PPP loan requests represent the overwhelming percentage of applications made via the online platform in 2021. The Bureau of Labor Statistics reported nonfarm payroll employment rose by 916,000 in March, and the unemployment rate edged down to 6.0 percent in its Jobs Report issued Friday, April 2, 2021.

The labor market continued to reflect the impact of the coronavirus (COVID-19) pandemic. In February, most of the job gains occurred in leisure and hospitality, with smaller gains in temporary help services, health care and social assistance, retail trade, and manufacturing. Many of these jobs are created by small businesses.

Monthly Comparison
+0.2%
13.5%
March 2021
13.3%
Feb 2021
Yearly Comparison
-1.9%
13.5%
March 2021
15.4%
March 2020
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“Traditional big bank lending rose slightly in March, but small business loans are still much harder to obtain now than they were before the pandemic,” said Biz2Credit CEO Rohit Arora, one of the nation’s leading experts in small business finance. “Right now, banks have been focused on making Paycheck Protection Program (PPP) loans to small businesses. These loans are backed by the Treasury, so there is little risk to them.”

Rohit Arora
Biz2Credit CEO
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Small Banks Image
Banks with assets less than $10 billion
Approvals bumped up a notch to 18.3% in March, compared to the 18.2% approval rate in February 2021. In contrast, small banks granted 38.9% of their small business loan applications in March 2020.
Monthly Comparison
+0.1%
18.3%
March 2021
18.2%
Feb 2021
Yearly Comparison
-20.6%
18.3%
March 2021
38.9%
March 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 23.3% of funding requests in March, up two-tenths of a percent from 23.1% in February.
Monthly Comparison
+0.2%
23.3%
March 2021
23.1%
Feb 2021
Yearly Comparison
-17.9%
23.3%
March 2021
41.2%
March 2020
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Alternative Lenders Image
Independent lending organizations not licensed as banks or credit unions
Approval rates among alternative lenders rose one-tenth of a percent from 23.8% in February to 23.9% in March.
Monthly Comparison
+0.1%
23.9%
March 2021
23.8%
Feb 2021
Yearly Comparison
-6.5%
23.9%
March 2021
30.4%
March 2020
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“All categories of lenders improved slightly in March 2021, but we are nowhere near the approval rates we saw pre-pandemic,” Arora said. “These figures are encouraging because the approvals are trending upwards.”

Rohit Arora
Biz2Credit CEO
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Credit Unions Image
Non-profit money cooperatives whose members borrow from pooled deposits
Credit unions rose one-tenth of a percent from 20.3% approval rate in February to 20.4% in March 2021. A year ago, credit unions approved 23.2% of the applications they received.
Monthly Comparison
+0.1%
20.4%
March 2021
20.3%
Feb 2021
Yearly Comparison
-2.8%
20.4%
March 2021
23.2%
March 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.