Small business loan approval percentages at large banks (or those with $ 10 billion or more in assets) fell from 13.9% in August to 14% in September. At the same time, approval rates for small banks rose to 19.5% in September, from 19.3% the month before, according to the latest Biz2Credit Small Business Loan Index.
“Business leaders are investing in their business and banks are increasingly willing to lend. These are good signs for the small business economy, ”said Rohit Arora, CEO of Biz2Credit. “Every category of lenders, including bank and non-bank lenders, has seen their loan approval percentages increase each month for the past five months.”
Institutional lender approval rates reached 24.5% in September, up from 24.3% of funding requests in August and 2.3 percentage points from a year ago. At the same time, approval rates for alternative lenders fell from 25.2% in August to 25.4% of funding requests in September. Last year, the September percentage for alternative lenders was 23.1%. Credit unions approved 20.6% in September, up a tenth of a percent from August but down from 21% in September 2020.
“Non-bank lenders are a viable source of funding for businesses that need cash fast,” Arora said.
For the index, Biz2Credit analyzed loan applications from businesses that have been in business for more than two years with credit scores over 680. The results are based on primary data submitted by over 1,000 small business owners. who applied for funding on the Biz2Credit platform.