Small Business Loan Approval Percentages Hit Record Highs for Banks and Institutional Lender in May, According to Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend

Strong Economy and Job Growth Reflected in Figures

ahrefstartSmall business loanahrefend approval rates for big banks (25.9%) continued the upswing with yet another new high in May 2018, according to the Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend (May figures) released today. The monthly analysis examined more than 1,000 credit applications from small businesses on Biz2Credit.com.

Big Banks

Big Banks

Big banks (assets of $10 billion+) are granting nearly three-in-ten small business loan applications, according to Biz2Credit figures. The 25.9% approval percentage, up two-tenths of a percent from April 2018, represents a post-recession high point for big banks.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

"May was another strong month for banks as they have benefitted from the overall strength of the economy, "

Rohit Arora

Rohit Arora, Biz2Credit CEO

Economy

"The unemployment rate hit an 18-year low, and average hourly pay rose 2.7 percent from a year prior. Notably, the Labor Department reported employment in construction continued on an upward trend in May with more than 25,000 new jobs created. There were also large increases in manufacturing, transportation and warehousing jobs. The U.S. economy is strong right now."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

ahrefstartSmall business loanahrefend approval rates rose at regional and community banks. Small banks granted 49.4% of the funding requests they received in May, up two-tenths from April. It represents the highest figure for small banks since May 2015
Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

"Small banks make a lot of SBA loans, which help small businesses expand. Many of these companies are involved in manufacturing, transportation and construction" . "Small businesses involved in those sectors need capital for growth, and smaller banks are now granting nearly half of their loan applications"

Rohit Arora

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

institutional lenders set yet another new Index record 64.7%, up one-tenth of a percent from April. These lenders (pension funds, insurance companies, and others), have become important players in small business lending.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

"Institutional investors are seeking high yields, and small business lending," ."Foreign investors are continuing to become involved. Small business lending is becoming a very important asset class for institutional lenders, who are able to offer funding at reasonable interest rates and term lengths."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Loan approval rates among alternative lenders remained at 56.4% from April. Approval percentages have slipped every month for almost two years, with the exception of a small uptick in November 2017.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"Even in a robust economy, there are still companies that don't qualify for traditional small business loans because they have not been in business long or have poor credit histories," . "Alternative lenders fill this niche; they are willing to provide funding, albeit at higher interest rates."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Credit unions approved 40.1% of loan applications in May, a one-tenth of a percent drop from April, which had set a record low for the Biz2Credit Small Business Lending Index.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

"Credit union lending to small business has stagnated," Arora said. "Not much has changed for them in the past couple of years."

Rohit Arora

Rohit Arora, Biz2Credit CEO

View Past Months

Access Archives

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
February 2019

Small Business Loan Approvals at Big Banks Hit New High; Other Categories of Lender Dip Slightly, According to Biz2Credit Small Business Lending IndexTM

Lending Atmosphere Still Solid for Small Business Borrowers

View Report
January 2019

Government Shutdown Slows SBA Lending Volume, But Approval Percentage Dip Only Slightly in January, According to Biz2Credit Small Business Lending IndexTM

Overall Economic Strength Still Bodes Well for Small Businesses in Search of Capital

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.