Small business loan approval percentages at big banks (more than $10 billion in assets) stalled for the first time since June of this year, staying at 13% in November, according to the latest Biz2Credit Small Business Lending Index.
“While it is good to see something other than a decrease in loan approval rates from big banks, there is still much work left to be done in order to get back to pre-pandemic numbers,” Rohit Arora, CEO of Biz2Credit, said.
Small bank approval percentages have continued to rise toward the end of 2023, going from 19.5% in October to 19.7% in November, marking an increase every month since June.
“As we close out this year, it remains a positive that small banks have started to become more of an option for business owners searching for capital,” Arora said. “The hope is that this trend will carry over into Q1 of 2024 and beyond.”
The approval rates of institutional investors rose again from 27.6% in October to 27.7% in November, while approval rates from alternative lenders also increased from 29.9% in October to 30% in November.
“The last time loan approvals rates from alternative lenders reached 30% was in March 2020, the month before all approval percentages were cut in half due to the COVID pandemic,” Arora said. “This should be a good sign for small business owners.”
Approval rates at credit unions reached a new all-time low number of 19.7% in November, dropping from 19.8% in October.
To determine its Small Business Lending Index, Biz2Credit analyzed loan requests from companies in operation for more than two years with credit scores greater than 680. The results are based on primary data submitted by more than 1,000 small business owners who applied for funding on Biz2Credit’s platform.
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