Biz2Credit Small Business Lending Index Reports Approval Rates at Banks and Institutional Lenders Soared in May 2014

All Categories of Lenders Are Approving Increasing Percentages of Loan Requests

Big Banks

Big Banks

NEW YORK, NY, June 10, 2014 - Small business loan approval rates at big banks ($10 billion+ in assets) rose to 19.6% in May 2014, up from 19.4% in April, while approval rates at small banks jumped to 51.6% from 51.1% from last month, according to the Biz2Credit Small Business Lending Index. Both figures are record highs for bank lending to small businesses reported in the monthly analysis of 1,000 loan applications on Biz2Credit.com.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

"Big banks are approving nearly one out of every five funding requests, and small banks are granting more than half. This development is a sign that the economy is improving." "Lenders are getting applications from more established businesses that are showing three years of profitability. At the same time, big banks are hungry to make loans, in part because the mortgage lending remains stagnant and because lending to solidly performing small businesses is less risky than it was during the recession."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Economy

"Small business owners are confident and are investing in the expansion of their businesses. They are seeking SBA loans, as well as non-SBA loans, which take a shorter period of time to approve, have less restrictions and more flexibility, and sometimes offer better interest rates."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

Institutional Lenders granted 59.1% of the funding requests they received in May, a nearly one-point jump from 58.3% in April. These institutions include insurance companies, credit funds, family funds, and other yield-hungry, non-bank financial institutions. They typically offer more competitively priced loan options than alternative lenders in amounts up to $1 million.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

"Institutional investors are taking away market share from alternative lenders." "They are gathering momentum as a category of small business lender as company owners to borrow larger sums of money at cheaper interest rates."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Approvals by alternative lenders decreased for the fifth consecutive month to 63.3% in May from 63.5% in April 2014. Banks and institutional lenders, which are attracting higher quality borrowers unwilling to pay the high interest rates that alternative lenders, such as cash advance companies, are offering.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"As the economy improves, businesses are able to get funding from traditional sources, and they are less desperate. Thus, they no longer need to borrow at any cost." "We are starting to see a flight away from short-term, high-cost money, such as cash advances. Many players continue to jump into this category, but they have missed the boat. Cash advance as a funding option may have indeed reached its peak."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Meanwhile, loan approval rate at credit unions improved to 43.6% in May, after having dropped to the lowest level ever (43.5%) in the three-year history of the Biz2Credit Index in April.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

"May was the best showing for credit unions all year, but they continue to lose ground in the small business lending marketplace."

Rohit Arora

Rohit Arora, Biz2Credit CEO

View Past Months

Access Archives

Aug 2019

Small Business Loan Approvals at Banks Continue to Reach New Heights, According to August 2019 Biz2Credit Small Business Lending Index™

View Report
July 2019

Small Business Loan Approvals at Banks Hit Record Highs, According to July 2019 Biz2Credit Small Business Lending IndexTM

Alternative Lending Drops and Credit Unions Sink to a Record Low

View Report
June 2019

Small Business Loan Approvals at Big Banks Hit Record Highs, According to June 2019 Biz2Credit Small Business Lending IndexTM

Big Banks, Regional and Community Banks, and Institutional Lenders Climb, While Alternative Lending Drops and Credit Unions Sink to New Low

View Report
May 2019

Small Business Loan Approvals at Big Banks Stay at Record Post-Recession High, According to May 2019 Biz2Credit Small Business Lending IndexTM

Small Banks and Institutional Lenders Climb, Credit Union Lending Remains at Post-Recession Low, Alternative Lending Stalls Again

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.