Loan Approval Rates Drop at Banks and Alternative Lenders in May 2017, According to Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend

Institutional Lenders Experience a Slight Increase

Loan approval rates at big banks ($10 billion-plus in assets), small banks, alternative lenders and credit unions dipped slightly in May 2017, according to the latest Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend , the monthly analysis of more than 1,000 small business loan applications on Biz2Credit.com.

Big Banks

Big Banks

Small business loan approval rates at big banks fell two-tenths of a percent from April's 24.3% figure, a post-recession high, to 24.1% in May 2017. The drop comes after approval rates at big banks climbed for most of the year.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

"Despite the overall strength of the U.S. economy, there are concerns about recent acts of terror, perceived instability of President Trump's administration, and his erratic behavior, "

Rohit Arora

Rohit Arora, Biz2Credit CEO

Economy

"Trump's promised tax cuts have not happened yet, and we don't really know if his overhaul of Obamacare will help small business owners. These factors cause anxiety in credit marketplaces. We've seen it on our platform as the volume of loan applications slowed in May."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

Loan approval rates at small banks also dropped in May to 48.8%, down from April's 49% figure. Small banks have flirted with the 50% mark, but have not reached it since October 2014.

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

"Small banks are approving almost half of their business funding requests. The demand for SBA-backed loans in the marketplace remains strong. As SBA loans are popular with both borrowers and lenders," one of the nation's leading experts in small business finance."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

Institutional lenders loan approval rates in May improved slightly to 63.8%, another new high on Biz2Credit's index. It marked the fifth time in the past six months that this category of lenders showed an increase in funding approval percentages.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

"The U.S. dollar remains strong against the euro, the British pound, and other international currencies. For this reason, foreign investors continue to look for high yields from America's small business credit marketplace, "said Arora. "There is no denying, however, that global investors have some anxiety about President Trump's performance in office thus far."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Loan approval rates dropped at alternative lenders by two-tenths of a percent in May, as non-bank lenders granted 57.7% of the funding requests. This marks nearly one year of consecutive decreases for this category of lenders.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"As banks and institutional investors close deals at levels that are still quite high, alternative lending has lost its attractiveness. Alternative lenders charge much higher rates, and this makes them lenders of last resort for many borrowers, "."Small business owners are able to secure financing at lower costs from other types of lenders fairly quickly. This hurts alternative lenders."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Loan approval rates at credit unions dropped one-tenth of a percent in May to 40.5%, another new low for this category of funders on Biz2Credit's index.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

"Credit unions continue to trend downwards in their approval percentages, " Arora says. "Their volume is low, and they are becoming less relevant in small business lending. I don't see this changing any time soon."

Rohit Arora

Rohit Arora, Biz2Credit CEO

View Past Months

Access Archives

September 2019

Small Business Loan Approvals at Big Banks Hit New Record in September, According to Biz2Credit Small Business Lending Index™

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Aug 2019

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

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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

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.