Small Biz Loan Approval Rates at Big Banks and Institutional Lenders Continued Surge in September, 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 September 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 23.4% in September, up one-tenth of a percent from August's figure. 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

"The Federal Reserve failed to increase the interest rates that banks and other lending institutions were hoping for".

Rohit Arora

Rohit Arora, Biz2Credit CEO

Economy

"While the Fed may decide to increase the interest rates at its next policy meeting in November, many banks are lagging behind in their loan goals for 2016. They must close more deals to meet those numbers. I expect big banks to finish strong for 2016, especially if the looming interest rate hike comes to fruition."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

Meanwhile, lending approval rates dropped slightly at small banks to 48.7% last month. It was the first time loan approval rates dropped at small banks in back-to-back months since March 2016.

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

"Not enough small banks are digitizing their loan approval process and that is holding them behind". "An interest rate increase would seemingly benefit small banks because right now conventional loan rates are actually lower than SBA-backed loans and that is resulting in lower volume of loan requests for this category of lenders."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

Institutional lenders' loan approval rates improved to an all-time high of 63% in September 2016. It was the third consecutive month that institutional lenders experienced increases in their loan approval rates as they continue to increase market share in marketplace lending.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

"The biggest advantages of institutional lenders are their ability to quickly process loans quickly at affordable terms for the borrower", one of the nation's leading experts on small business finance. "Right now, they are doing it faster and more efficient than anyone on the market. High yields and low default rates are attracting global investors to the marketplace as it is proving to be a hot commodity for investors."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Alternative lenders experienced a decrease in loan approval rates in September, approving 59.7% of loan requests as it continues its downward spiral.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

"Small business owners no longer have to borrow at any cost and typically alternative lenders charge much higher rates". "Alternative lenders have lost much of the competitive advantage they held for so long. As other categories of lenders offer better terms and financing just as quickly, we will see alternative lenders continue to lose market share in loan volume."

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Loan approval rates at credit unions dropped in September to an all-time Index low of 41.3%. However, it was the first time that loan approval rates didn't drop in this category of lenders in over a year.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

"Credit unions are not as relevant as they once were when it comes to small business finance". "They're lagging behind in technology, a mistake in the 21st century, and are becoming an afterthought for borrowers."

Rohit Arora

Rohit Arora, Biz2Credit CEO

View Past Months

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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.