Small Biz Loan Approval Rates at Banks and Institutional Lenders Reach New Heights in November, According to Biz2Credit Small Business Lending Index

Alternative Lenders and Credit Unions Continue to Plummet

Loan approval rates at big banks ($10 billion+ in assets) and institutional lenders continued their recent surge, improving to new highs in November 2016, according to the most recent Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend,the monthly analysis of more than 1,000 small business loan applications on Biz2Credit.com. Small banks also experienced an uptick in small business loan approval rates in the last month. At the same time, approval rates at alternative lenders and credit unions dropped in the last month.

Big Banks

Big Banks

Small business loan approval rates at big banks improved to 23.7% in November, up two-tenths of a percent from October. It marked the eighth time in the last nine months that lending approval rates increased at big banks.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

"Banks have invested in technology the last year is paying its dividends. Advances in analytics enable them to approve a higher percentage of loans while lowering loan default rates."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Economy

"When the Fed decides to increase the interest rates, I expect that loan approval rates will continue to improve gradually as it will become more profitable for them to lend."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

Additionally, approval percentages at small banks improved 48.8% last month, up one-tenth of a percent from October.

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

Institutional lenders

Institutional lenders

For the fifth consecutive month, loan approval rates at institutional lenders improved, climbing to a new Index high of 63.3% in November 2016.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

"Institutional lenders have been a big story in marketplace lending in 2016. They are here to stay," said Arora, one of the nation's leading experts on small business finance. "Right now, they are processing loans faster and more efficiently than other categories of lenders. Capital is flowing from many foreign investors due to the high yields because of uncertainty in some international markets. I expect more global investors to be involved in U.S. small business lending during 2017." Arora believes the election of Donald Trump will positively impact lending markets. The President-elect has pledged to repeal Dodd-Frank, which brought of bevy of regulations to the banking sector since it was signed into law. "If Dodd-Frank is scaled back, small banks could be the biggest beneficiaries".

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Loan approval rates dropped at alternative lenders in November, as they granted 59.2% of loan funding requests they received.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"CAN Capital, one of the largest and oldest players in alternative lending, has stopped lending money and replaced CEO Dan DeMeo". "Alternative lenders have lost favor because of the high rates they charge. Meanwhile, they lost much of their competitive advantage of the speed of their decision-making as other types of lenders continue to invest in technology to expedite the loan approval process."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Loan approval rates at credit unions dropped in November to yet another Index low of 41.1%.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

"Sadly, credit unions are becoming an afterthought for borrowers in small business loans". "They aren't keeping up with the times as other categories of lenders continue to dominate the market share in small business lending."

Rohit Arora

Rohit Arora, Biz2Credit CEO

View Past Months

Access Archives

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
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.