Small Business Loan Approvals Stalled at Big Banks, Rose at Small Banks and Alternative Lenders in November 2023
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Total nonfarm payroll employment increased by 199,000 in November, and the unemployment rate edged down to 3.7%, according to the Jobs Report release by the U.S. Bureau of Labor Statistics on Friday, Dec. 8. Job gains occurred in health care and government. Employment also increased in manufacturing, reflecting the return of workers from a strike. Employment in retail trade declined. Many of these jobs are created by small businesses.
To determine its Small Business Lending Index, Biz2Credit analyzed loan requests from companies in operation for more than two years with credit scores above 680. The results are based on primary data submitted by more than 1,000 small business owners who applied for funding on Biz2Credit's platform. To view the November 2023 Index, click here.
“While it is good to see something other than a decrease in loan approval rates from big banks, there is still much work left to be done in order to get back to pre-pandemic numbers,” said Rohit Arora, CEO of Biz2Credit, and one of the nation’s leading experts in small business finance.
“As we close out this year, it remains a positive that small banks have started to become more of an option for business owners searching for capital,” said Arora. “The hope is that this trend will carry over into Q1 of 2024 and beyond.”
“The last time loan approvals rates from alternative lenders reached 30% was in March 2020, the month before all approval percentages were cut in half due to the COVID pandemic,” Arora added. “This should be a good sign for small business owners.”
The Report
About Biz2Credit Small Business Lending Index™
The Biz2Credit Small Business Lending Index™ 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 Index™ 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.