Small Business Loan Approvals at Big Banks Hit New Record in September, According to Biz2Credit Small Business Lending Index™

Small business leading

Biz2Credit Small Business Leading IndexTM

Small Business Loan Approvals at Big Banks Hit New Record in September

Big Banks

Big Banks

Approval rates for small business loan applications rose to another post-recession record (27.9%) at big banks ($10 billion+ in assets), while approval percentages also stayed above 50% at small banks in September.Meanwhile, the Labor Department’s Jobs Report released on October 4, reported that nonfarm payroll employment rose by 136,000 jobs in September, and the unemployment rate hit a 50-year low of 3.5%. Employment in health care and in professional and business services continued to trend upwards, according to the U.S. Bureau of Labor Statistics.

Aug 2018
26.5%
Sep 2018
26.7%

Monthly Comparison

Aug 2018
26.5%
Sep 2018
26.7%

Yearly Comparison

“Bank lending to small businesses remains strong at big banks and regional and community banks. With the recent Fed announcement that interest rates will drop, I expect it will continue to grow for the rest of 2019,” said Biz2Credit CEO Rohit Arora, who oversees the monthly research derived from more than 1,000 small business credit applications on his company’s online lending platform.

Rohit Arora

Rohit Arora, Biz2Credit CEO

Small Banks

Small Banks

Small bank approvals of small business loan applications in September remained at 50.3%.

Jul 2018
49.7%
Aug 2018
49.8%

Monthly Comparison

Aug 2017
49%
Aug 2018
49.8%

Yearly Comparison

“Traditional bank loans and SBA loans are available at smaller banks. Because of the overall strength of the economy, greater numbers of businesses qualify for funding,” Arora explained. “Having approval rates above the 50% mark is indeed a good sign.”

Rohit Arora

Rohit Arora, Biz2Credit CEO

Institutional lenders

Institutional lenders

Institutional lenders’ approval rates again rose one-tenth of a percent to 65.9% from August’s figure of 65.8%.

Jul 2018
64.8%
Aug 2018
64.9%

Monthly Comparison

Jul 2018
63.9%
Aug 2018
64.9%

Yearly Comparison

“Institutional lenders are a good source of small business loans and have been for the past several years,” Arora said.

Rohit Arora

Rohit Arora, Biz2Credit CEO

Alternative lenders

Alternative lenders

Small business loan approval rates among alternative lenders slipped one-tenth of a percent to 56.5% from 56.6% in August.

Jul 2018
56.5%
Aug 2018
56.6%

Monthly Comparison

Aug 2017
57.1%
Aug 2018
56.6%

Yearly Comparison

“Non-bank alternative lenders are a viable funding source for companies whose credit scores do not qualify them for traditional bank loans,” Arora said. “Even as bank lending shows growing strength, alternative lenders are valuable as a funding source to many small business owners – especially ones who have credit scores of 650 or less.

Rohit Arora

Rohit Arora, Biz2Credit CEO

Credit unions

Credit unions

Credit unions’ approval rates fell to 39.7% in September, slipping from the 40% mark in August. The figure is a record low for since Biz2Credit began analyzing business loan approval percentages in 2011.

Jul 2018
40.3%
Aug 2018
40.2%

Monthly Comparison

Aug 2017
40.3%
Aug 2018
40.2%

Yearly Comparison

“Other categories of lenders are all moving to digital applications. I would say that credit unions have lost their way in small business lending in today’s low interest rate environment,” said Arora, who oversees the Biz2Credit research. “Certainly, the Member Business Lending cap (12.25% of their assets) does not help. Meanwhile, banks, institutional lenders and alternative lenders are much more aggressive in small business lending.

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.