Approval Rates at Big Banks, Institutional Lenders Hit New Highs, According to May 2015 Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend

Approval Percentages at Small Banks, Alternative Lenders and Credit Unions Continue to Falter

Small business loan approval rates at Big Banks and institutional lenders improved to new highs in May 2015, according to the Biz2Credit Small Business Lending Index, the monthly analysis of 1,000 loan applications on Biz2Credit.com.

Big Banks

Big Banks

Big Banks ($10 billion+ in assets) approved 21.9% of small ahrefstartbusiness loan requestsahrefend in May 2015, up from 21.7% in April, marking the seventh consecutive month that approval rates have increased in this category of lenders. A year-to-year comparison shows that loan approval rates are up approximately 12 percent.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

"Low interest rates continue to prevail. In fact, Big Banks are granting a higher percentage of small ahrefstartbusiness loan requestsahrefend than at any time since the recession."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Economy

"Lending to businesses remains to be a profitable component of bank portfolios when the loan amounts are substantial. Thus, it is a good time to borrow. Things won't stay like this forever."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

Lending approval rates at small banks dropped one-tenth of a percent in May to 49.5% from 49.6% last month. For the seventh consecutive month, small banks have denied more than half of their loan requests. In the last year, loan approval rates at small banks have dropped in 10 of those months.

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

"Electronic lending marketplaces, such as Biz2Credit, process loan requests from business owners quickly; this works against small banks -- especially ones that are doing lots of SBA loans". "As the industry has evolved over the past few years, quick decision-making has become increasingly important. Small banks often are not technologically equipped to get loans done fast."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

Meanwhile, institutional lenders approved 61.3% of funding requests by small business owners in May, up from 61.1% in April. For the first time in Index history, lending approval rates at institutional lenders are higher than alternative lenders, which consist of merchant cash advance companies, factors, and other non-bank lenders Approval rates by institutional lenders have increased each month ever since Biz2Credit began monitoring this category of lenders in January 2014.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

"Institutional lenders are establishing themselves as mainstream lenders in the small business marketplace and are continuing to replace cash advance companies, which typically charge interest rates that are simply too high", one of the nation's leading small business finance experts. "Institutional lenders are offering more attractive loan packages to businesses on marketplace lending platforms, such as Biz2Credit's. As a result, they are making funding deals with more creditworthy borrowers."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Approval rates at alternative lenders dipped to an Index-low of 61% in May, from 61.1% in April. Alternative lenders' approval percentages have declined each month since January 2014, coinciding with the emergence of institutional lenders in the small business lending marketplace.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"With the relatively strong economy, businesses are no longer forced to borrow at any cost". "Alternative lenders that charge substantially higher rates tend to be receiving requests from borrowers that are less creditworthy than others."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Credit unions approved 43.1% of loan applications in May, a slight improvement from 43% in April 2015.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

"Credit unions have shown little momentum this year. They are still lagging in technological upgrades and hampered by the MBL cap that allows them to lend only 12.25% of their total assets".

Rohit Arora

Rohit Arora, Biz2Credit CEO

View Past Months

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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

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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

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April 2019

Small Business Loan Approvals at Banks Jumped Again in April Biz2Credit Small Business Lending IndexTM

Credit Union Lending Remains at Post-Recession Low

View Report
March 2019

Small Business Loan Approvals at Big Banks Hit New High: Biz2Credit Small Business Lending IndexTM

Credit Union Lending Percentages Drop to Historic, Post-Recession Low

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.