Big Banks Approved 25 Percent of Small Business Loan Applications in October 2017, to Reach Post-Recession High, According to Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend

Study shows continuing trend of rising approval percentages for big banks and institutional lenders while alternative lenders and credit unions stall

ahrefstartBusiness loanahrefend approval rates at big banks ($10 billion-plus in assets) hit a post-recession high of 25% in October 2017, according to the latest Biz2Credit Small Business Lending IndexsuperscriptstartTMsuperscruptend , a monthly analysis of more than 1,000 small business loan applications on Biz2Credit.com.

Big Banks

Big Banks

ahrefstartSmall business loanahrefend approval rates at big banks climbed two-tenths of a percent to reach the 25% benchmark from 24.8% in September.
Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

"Big bank lending to small business continues to climb to the point that one-in-four loan applications are approved. During the darkest point of the post-recession credit crunch, they granted less than one-in-ten requests. We have come a long way,". who oversaw the research.

Rohit Arora

Rohit Arora, Biz2Credit CEO

Economy

"The big banks are making a lot of traditional small business loans, which take less time to process than SBA loans. They also are granting a lot of working capital requests," Arora added. "Stock markets continue to perform well, and Trump's tax cut plan is viewed as good news for business owners. Entrepreneurs have a better chance of obtaining funding now than at any other time in the past decade."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

Meanwhile, approval percentages at small banks dipped to 48.9% in October from 49.1% from the previous month.

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

"Despite a drop in approval percentages, small banks are still processing a large number of SBA-backed loans," added Arora, one of the country's leading experts in small business finance. "Nearly half of the funding requests by small businesses at small banks are approved. This shows that the U.S. small business credit market is strong."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

Institutional lenders' loan approval rates again improved by one-tenth of a percent in October to 64%, a new high for the category in the Biz2Credit Small Business Lending Index.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

"The economy is doing well, the jobs report was solid, and investors from beyond America's shores are entering the small business credit marketplace with success," added Arora. "All of these factors instill confidence in business owners who are contemplating start-up funding or expansion financing."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Loan approval rates among alternative lenders continue to drop; approval rates dipped two-tenths of a percent in October to 56.8%. Approval percentages for alternative lenders have experienced a slow decline as 2017 draws to a close.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"Alternative lenders are often 'lenders of last resort' because of their high interest rates. However, they play an important role in small business finance because they are willing to funding to businesses with poor credit scores or no credit history at all," .

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Loan approval rates at credit unions Loan approval rates at credit unions dropped a tenth of a percent to 40.2%, a new low point for lenders in this category."

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

"Many credit unions seem averse to setting up systems for digital applications. They haven't invested the amount of money that banks, alternative lenders, and other lenders have made into developing online loan applications,". "This is an ongoing issue that I just don't see changing."

Rohit Arora

Rohit Arora, Biz2Credit CEO

View Past Months

Access Archives

Aug 2019

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

View Report
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
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

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.