Small Biz Loan Approval Rates at Big Banks and Institutional Lenders Continued Surge in October, According to Biz2Credit Small Business Lending Index

Small banks, Alternative Lenders and Credit Unions Experience Setbacks

Loan approval rates at big banks ($10 billion+ in assets) and institutional lenders improved to all-time highs in October 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. Meanwhile, approval rates at small banks, alternative lenders and credit unions all dropped in the last month.

Big Banks

Big Banks

Small business loan approval rates at big banks improved to 23.5% in October, up one-tenth of a percent from September's figure of 23.4%. It marked the seventh time in the last eight 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 want to meet their targets for the year, which means the spigot of small business lending has opened up."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Economy

"If the Fed increases interest rates, as predicted, at its next policy meeting, I expect to see even stronger numbers. Banks will try to fund companies at higher, more profitable rates."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

Meanwhile, lending approval rates at small banks remained flat at 48.7% in October.

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

"Small banks are seeking increase their number of closed deals by offering SBA loans. They are feeling the pressure of thee increased activity by big banks and institutional lenders, who are strong competitors". "Smaller banks still are processing more SBA-backed loans than any other type of lender."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

Institutional lenders' loan approval rates also climbed to a new Index high of 63.1% in October 2016. It was the fourth consecutive month that institutional lenders improved approval percentages. Institutional lenders continue to increase their share of the small business lending market.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

"Institutional lenders are taking advantage of their ability to process loans quickly at very affordable rates", one of the nation's leading experts on small business finance. "They are faster and more efficient than other categories of lenders. Quite a few of them are foreign-based investors who are nervous about Brexit and hungry for high yields and low default rates."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Loan approval rates at Alternative lenders dipped yet again in October, as they granted 59.5% 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

"Alternative lenders typically charge high rates as a tradeoff for the risk they are assuming in small business loan-making and the speed by which they make funding decisions". "Unless a borrower is perceived high risk, he or she can likely secure better terms from other types of lenders. Borrowers want lower interest rates and longer terms than alternative lenders have been offering."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Loan approval rates at credit unions dropped in October to yet another Index low of 41.2%.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

"Credit unions are struggling to maintain their relevance in small business lending". "They're becoming an afterthought for borrowers."

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.