Small business loan approval percentages at big banks (or those with $10 billion or more in assets) increased from 13.9% in August to 14% in September. Meanwhile, approval rates at small banks rose to 19.5% in September from 19.3% the month before, according to the latest Biz2Credit Small Business Lending Index.
“Business owners are investing in their companies, and banks are increasingly willing to lend. These are good signs for the small business economy,” Rohit Arora, CEO of Biz2Credit, said. “Every category of lender, including bank and non-bank lenders, have seen their loan approval percentages rise every month during the past five months.”
Institutional lender approval rates grew to 24.5% in September, up from 24.3% of funding requests in August and up 2.3 percentage points from one year ago. Meanwhile, alternative lender approval rates rose from 25.2% in August to 25.4% of funding applications in September. Last year, the September percentage for alternative lenders was 23.1%. Credit unions approved 20.6% in September, up one tenth of a percent from August but down from 21% in September 2020.
“Non-bank lenders are a viable source of funding for companies that need money quickly,” Arora said.
For the index, Biz2Credit analyzed loan requests from companies in business more than two years with credit scores of more than 680. The results are based on primary data submitted by more than 1,000 small business owners that applied for funding on Biz2Credit’s platform.
Like this story? Begin each business day with news you need to know! Register now for FREE Daily E-News Broadcast and start YOUR day informed!