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Big Bank Loan Approval Rates Hit New Heights in August 2017, According to Biz2Credit Small Business Lending Index ™

Biz2Credit Small Business Lending Index ™ Shows Acceleration of Loans

Big banks are approving small business loans at record rates, according to the latest Biz2Credit Small Business Lending Index ™, which tracks loan approval rates of big banks, small banks, institutional lenders (which also set a new high), alternative lenders and credit unions.

Biz2Credit CEO Rohit Arora, one of the nation’s leading experts in small business lending, oversaw the research. He believes lending has been spurred by:

  • Overall optimism in the economy
  • Entrepreneur willingness to take risks — because of the solid economy and the strength of their tax returns filed in April
  • Bank willingness to lend – spurred in part by higher interest rates and the possibility of another increase
  • Growth of industries such as logistics, food and IT

 

 

NEW YORK, NY, September 12, 2017 — Loan approval rates at big banks ($10 billion-plus in assets) hit another post-recession high in August 2017, according to the latest Biz2Credit Small Business Lending Index ™, the monthly analysis of more than 1,000 small business loan applications on Biz2Credit.com. Loan approval percentages of institutional investors also set a new record.

Small business loan approval rates at big banks improved one-tenth of a percent to 24.6% in August, setting a new high for the Biz2Credit Index. Similarly, approval percentages at small banks also rose one-tenth of a percent in August to 49.0% from July’s 48.9% figure.

“It’s a good time for bank lending; the big banks are approving nearly a quarter of the loan requests they receive from small businesses while the smaller banks are granting almost half of the funding applications they receive,” explained Biz2Credit CEO Rohit Arora, who oversaw the research. “The economy is holding up well: the job market is strong, oil prices are still relatively low, and home values have gone up, which makes entrepreneurs feel more secure and confident.”

Institutional lenders’ loan approval rates in August remained at 63.9%, the all-time high for the Biz2Credit Small Business Lending Index.

“The dollar is strong, and there is also hope that President Trump’s promised tax cuts will pass and spur more economic growth,” added Arora, one of the country’s leading experts in small business finance. “With interest rates up a bit, it’s profitable for lenders to close deals. Thus, bank lending is as strong as it has been the mid-2000s. Despite the daily drama in Washington, global growth has picked up, and the U.S. economy seems to be on solid footing.”

Loan approval rates among alternative lenders continue to decline; approval rates dipped one-tenth of a percent in August to 57.1%. Approval percentages have dropped every month for more than a year.

“Alternative lenders still are players in small business lending because they are willing to provide funding for borrowers who have less than stellar credit or little credit history at all,” Arora explained. “Since they accept higher risk by funding borrowers who do not have stellar credit histories, alternative lenders charge at a higher cost of capital.”

Loan approval rates at credit unions dipped a notch to 40.3% in August, thereby reaching a new low for this category of funders on Biz2Credit’s index.

“Credit unions continue to lose their relevance in small business lending because they have not invested in technology and are often slow in their deal-making,” Arora explained. “Further, the credit union member business-lending (MBL) cap has not risen above 12.25% of assets. This remains an ongoing issue.”

To view the August 2017 and historic figures, click HERE.

About the Biz2Credit Small Business Lending Index
Biz2Credit analyzed loan requests ranging from $25,000 to $3 million from companies in business more than two years with an average credit score above 680. Unlike other surveys, the results are based on primary data submitted by more than 1,000 small business owners who applied for funding on Biz2Credit’s online lending platform, which connects business borrowers and lenders.

About Biz2Credit
Founded in 2007, Biz2Credit has arranged more than $1.7 billion in small business financing and was recently named to Crain’s New York’s Fast 50 and the top 150 of fast-growing companies on Deloitte’s 2016 Technology Fast 500.Biz2Credit is expanding its industry-leading technology in custom digital platform solutions for leading banks and other financial institutions, investors and service providers in the U.S. Visit www.biz2credit.com or follow Biz2Credit on Twitter: @Biz2Credit, Facebook: www.facebook.com/biz2credit and LinkedIn: https://www.linkedin.com/company/biz2credit-llc.

Timothy Kelly
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Timothy Kelly

Tim Kelly is the Founder of ForexTV. Since its inception in 2003, ForexTV has been a global leader in forex news and has expanded its news coverage to multiple industries. ForexTV is now one of the most recognized brands in global financial news. Mr. Kelly was also the creator and co-founder of 401kTV where he served as Managing Editor until April 2017.

Mr. Kelly is an expert in online marketing, search engine optimization, content development and content distribution. He has consulted some of the top brokerages, media companies and financial exchanges on online marketing and content management including: The New York Board of Trade, Chicago Board Options Exchange, International Business Times, Briefing.com, Bloomberg and Bridge Information Systems and 401kTV.

He continues to be a regular market analyst and writer for ForexTV.com. He holds a Series 3 and Series 34 CFTC registration and formerly was a Commodities Trading Advisor (CTA). Tim is also an expert and specialist in Ichimoku technical analysis. He was also a licensed Property & Casualty; Life, Accident & Health Insurance Producer in New York State.

In addition to writing about the financial markets, Mr. Kelly writes extensively about online marketing and content marketing.

Mr. Kelly attended Boston College where he studied English Literature and Economics, and also attended the University of Siena, Italy where he studied studio art.

Mr. Kelly has been a decades-long community volunteer in his hometown of Long Island where he established the community assistance foundation, Kelly's Heroes. He has also been a coach of Youth Lacrosse for over 10 years. Prior to volunteering in youth sports, Mr. Kelly was involved in the Inner City Scholarship program administered by the Archdiocese of New York.

Before creating ForexTV, Mr, Kelly was Sr. VP Global Marketing for Bridge Information Systems, the world’s second largest financial market data vendor. Prior to Bridge, Mr. Kelly was a team leader of Media at Bloomberg Financial Markets, where he created Bloomberg Personal Magazine with an initial circulation of over 7 million copies monthly.
Timothy Kelly
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