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

Small business leading

Biz2Credit Small Business Leading IndexTM

Small Business Loan Approval Rates at Big Banks Rose in March 2021

Big Banks

Big Banks

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.

Feb-21
13.3
March-21
13.5

Monthly Comparison

March-20
15.4
March-21
13.5

Yearly Comparison

“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

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

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.

Feb-21
18.2
March-21
18.3

Monthly Comparison

March-20
38.9
March-21
18.3

Yearly Comparison

“Approvals of traditional business loans and SBA loans at small banks are less than half of what they were prior to COVID,” Arora said.

Rohit Arora

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

Institutional lenders approved 23.3% of funding requests in March, up two-tenths of a percent from 23.1% in February.

Feb-21
23.1
March-21
23.3

Monthly Comparison

March-20
41.2
March-21
23.3

Yearly Comparison

Alternative lenders

Alternative lenders

Approval rates among alternative lenders rose one-tenth of a percent from 23.8% in February to 23.9% in March.

Feb-21
23.8
March-21
23.9

Monthly Comparison

March-20
30.4
March-21
23.9

Yearly Comparison

“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

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

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.

Feb-21
20.3
March-21
20.4

Monthly Comparison

March-20
23.2
March-21
20.4

Yearly Comparison

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

As Small Business Businesses Apply for PPP Funding, Approval Percentages for Traditional Loans Plummet

View Report
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

View Report
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

Approval percentages for all categories of lenders dropped more than 50% from December 2019

View Report
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

Approval percentages are down 50% or more for all categories of small business lenders as the pandemic surges

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.