Biz2Credit Small Business Lending Index for May 2013 Reports 70 Percent Increase in Big Bank Loan Approvals Over the Past 12 Months
Monthly Index Reports All-Time Index High in Approval Rates by Big Banks; Approvals at Small Banks, Alternative Lenders and Credit Unions Drop
NEW YORK, NY, June 12, 2013 - Small business loan approvals at big banks rose to a new high of 17.3%, according to the ahrefstartBiz2Credit Small Business Lending Indexahrefend, a monthly analysis of 1,000 loan applications on Biz2Credit.com.
Big Banks
Further, loan approvals at big banks experienced increased in five of the last six months. More importantly, in a year-to-year comparison, the Index finds small business lending approvals at big banks are up 70 percent over the figure from last May 2012.
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"The jump in approvals at big banks is a product of their heavy investments in technology to improve the method of processing loan applications. A number of big banks putting a lot of money into upgrading their small business loan process with the technological innovations that increase the speed and service of approvals."
Rohit Arora, Biz2Credit CEO
Arora sees the gradually improving economy and lending conditions as the driving forces in the increase in small business loan approvals at big banks. "We are seeing higher credit-quality customers apply for loans at big banks. Meanwhile, the banks are increasing their customer service. "
Rohit Arora, Biz2Credit CEO
Small Banks
Loan approvals at small banks dropped for the first time in six months. Small business loan approvals in April 2013 were previously at an all-time index high of 50.9% before dipping to 49.5% in May 2013. However, a year-to-year comparison indicates approvals are still up about ten percent from last year's figures.
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"Although small banks continue to be aggressive players in small business lending, they are beginning to feel heat from the competition of big banks. Small banks must continue to invest in technology to stay ahead of the game. Otherwise big banks will take over," suggested Arora, one of the nation's leading experts in small business finance. "Big banks often offer better rates than small banks and pricing is one of the many deciding-variables, so it is essential that small banks remain diligent in keeping up with technological advances and process loans quicker."
Rohit Arora, Biz2Credit CEO
Alternative lenders
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Credit unions
Credit union approvals of small business loans continue to plummet, dropping to 45.0% from 45.2% in April 2013. Loan approvals continue to set all-time Index lows for credit unions. Credit unions are still restricted by an MBL cap of 12.25% of assets and continue to lag behind in technology in comparison to their competition. Debate over lifting the cap continues in Washington.
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"The return of big banks to the small business credit market further threatens credit unions," Arora explained. "Lengthy processes to obtain loans at credit unions are often a large deterrent for customers, which have influenced the movement in higher credit-quality customers electing other lending platforms as their primary option."
Rohit Arora, Biz2Credit CEO
View Past Months
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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 |
| 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 |
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Approval percentages are down 50% or more for all categories of small business lenders as the pandemic surges |
| View Report |
| October 2020 |
Small Business Loan Approval Rates at Banks Declined in October 2020: Biz2Credit Small Business Lending Index™ |
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Small Businesses Capital Is Hard to Secure |
| View Report |
| September 2020 |
Small Business Loan Approval Rates at Banks Fell Again in September 2020: Biz2Credit Small Business Lending Index™ |
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Small Businesses in Limbo Awaiting PPP Loan Forgiveness |
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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.