Biz2Credit Small Business Lending Index™ Reports Loan Approval Percentages Dropped at Banks and Non-Bank Lenders in October 2022
Total nonfarm payroll employment increased by 261,000 in October, and the unemployment rate rose slightly to 3.7%, according to the Jobs Report released by the U.S. Bureau of Labor Statistics that released on Friday, November 4, 2022. Notable job gains occurred in health care, professional and technical services, and manufacturing. Many of these positions are created by small businesses, which are responsible for the lion’s share of new jobs in the private sector economy.
Biz2Credit analyzed loan requests from companies in business 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 report for October 2022, click here.
"Continued inflation and uncertainty over how high the Federal Reserve would set interest rates cast a shadow over small business lending in October,” said Rohit Arora, CEO of Biz2Credit and one of the nation’s leading experts in small business finance. “Approval percentages at big banks dropped for the fourth consecutive month in October. Likewise, approvals at small banks, which had increased steadily since April 2021, dropped for the first time in well over a year.”
“While monetary policy aims to curb inflation, it hasn’t showed obvious signs of working yet,” Arora added. “This is bad news for small businesses in search of capital. Loans are harder to get, and the cost of capital has gone up. This is a double whammy for business owners.”
“Inflation is a big concern for small business owners, whose costs continue to rise and eat into profitability. However, the opposite of inflation is a recession, which is also problematic for small companies,” Arora said. “It’s a tough time for small business owners right now.”