Loan approval percentages down slightly at big banks and credit unions, but small banks and non-bank lenders show continued growth
/EIN News/ — NEW YORK, Sept. 13, 2022 (GLOBE NEWSWIRE) — Small business loan approval percentages at big banks ($10 billion in assets) fell from 15.3% in July to 15.1% in August, but increased to small banks from 21.2% in July to 21.4%according to the last Biz2Credit Small Business Loan Index™ published today.
Approval percentages improved slightly among institutional lenders and alternative lenders, while loan approvals from credit unions fell:
- Iinstitutional lenders approved 25.9% loan applications in August, a slight increase from 25.8% in July. Approvals in this lending category have steadily increased in 2022.
- Alternative lenders approval rates fell from 27.2% in July to 27.3% in August.
- credit unions fell slightly again, from 20.4% in July to 20.3% in August.
“General conditions are getting tighter and big banks are taking more provisions now,” said Rohit Arora, CEO and co-founder of Biz2Credit, and one of the nation’s leading small business lending and fintech experts. “As smaller banks are more active in SBA lending, their approval rates are still high as demand for government-backed products is high.”
Total non-farm payroll employment rose by 315,000 in August and the unemployment rate rose to 3.7%, according to the jobs report from the U.S. Bureau of Labor Statistics released on Friday. September 2, 2022. Notable job gains occurred in professional and business services. , healthcare and retail. Many of these jobs are created by small businesses.
Thirty-seven percent of small business owners said inflation was their biggest problem running their businesses, up three points from June and the highest level since the fourth quarter of 1979, according to the latest NFIB Small Business Optimism Index (August 9, 2022).
“Inflation is hitting small businesses hard because the cost of their inputs has gone up. Thus, they need more working capital. Additionally, labor shortages have forced companies to do more with less. Since their level of automation is lower than that of large enterprises, the higher labor and material costs impact smaller enterprises more,” added Arora.
“Another cause for concern is that consumer spending is going more towards essential goods and services, rather than luxury and travel,” Arora said. “So I expect a further decline in loan approvals in the fall.”
Biz2Credit analyzed loan applications from businesses that had been in business for 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 financing on the Biz2Credit platform. To view the August 2022 report, Click here.
Founded in 2007, Biz2Credit has arranged over $7 billion in small business financing. The company extends its cutting-edge technology into customized digital platform solutions for banks and other financial institutions, investors and service providers. Visit www.biz2credit.com or Twitter @Biz2Credit, Facebook and LinkedIn.
Contact: John Mooney, (908) 720-6057, [email protected]