Small business loan approval rates at big banks improved two-tenths of a percent to 24.8% in September, up from 24.6% in August and setting another new high for the Biz2Credit Index.
"If you are seeking small business loans, you have a better chance now at securing funding than at any other time since the Great Recession"
Meanwhile, approval percentages at small banks also rose one-tenth of a percent last month to 49.1%, a slight uptick from August's 49.0% figure.
"Big banks are approving nearly a quarter of the applications they receive from small businesses. Small banks are doing a lot of SBA loans, and institutional lenders are on the rise. The small business credit market is robust at the moment for anyone who has a decent credit history."
Institutional lenders' loan approval rates improved by one-tenth of a percent in September to 63.9%, a new high for the category in the Biz2Credit Small Business Lending Index.
"Now that President Trump's tax proposal has been unveiled, business owners are hoping that the cuts will further stimulate economic growth," added Arora, one of the country's leading experts in small business finance. "The stock markets are strong, jobs are being created, and oil prices have dropped further. All of these factors instill confidence in business owners who are contemplating start-up or expansion financing."
Loan approval rates among alternative lenders continue to drop; approval rates dipped one-tenth of a percent in September to 57.0%. Approval percentages for alternative lenders have been on a slow, continuous monthly decline for more than a year.
"Alternative lenders still play a valuable role in small business finance because they provide funding to businesses with poor credit scores or no credit history at all," Arora explained. "They make quick decisions and accept higher levels of risk. However, they charge higher rates than other types of lenders."
Loan approval rates at credit unions remained stagnant at 40.3%, which remains the low mark for this category of funders on Biz2Credit's index.
"Credit unions still lag behind other types of lenders in their technological upgrades, and they are still handcuffed by the credit union member business-lending (MBL) cap, unfortunately," Arora explained. "It's an ongoing issue for them."