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Biz2Credit Small Business Lending Index Shows Business Loans Soaring

Business Loans Hit Record Levels In September

by Vicki Schmelzer

Biz2Credit’s Small Business Lending Index survey, released Tuesday, showed that bank and Institutional lender business loans approval rates continued to climb in September. The survey, which analyzes more than 1,000 small business loan applications on Biz2Credit.com’s lending platform, showed that small business approval rates at big banks, i.e. those with $10 billion-plus in assets, rose to 24.8% in September (a new record high) from 24.6% in August. This compared to 23.5% in September 2016.

Business loan approval rates at small banks edged up also, to 49.1% in September, from 49.0% in August and compared to 48.7%, in September 2016. Loan approval rates at institutional lenders stood at 63.9% in September unchanged from August, which was already a new record high for this category of the Biz2CreditSmall Business Lending Index. In September 2016, institutional lenders’ loan approval rates were 63.1%.

In contrast, loan approval rates for alternative lenders continued to slip, with approval rates at 57.0% in September versus 57.1% in August and compared to 59.5% in September 2016. Approval percentages have been on the decline for over a year. Credit Union loan approval rates held at 40.3% in September, unchanged from August and compared to 41.2 in September 2016. August/September were new lows for this category of funders on Biz2Credit’s index.

During the September survey period, Biz2Credit analyzed loan requests, ranging from $25,000 to $3 million, from companies in business for longer than two years that had an average credit score above 680.

Earlier Tuesday also, the National Federation of Independent Businesses (NFIB) released its Small Business Economic Trends Survey. The headline Small Business Optimism Index fell to 103.0 in September, down from 105.3 in August and 105.2 in July.

On borrowing needs, “Two percent of owners reported that all their borrowing needs were not satisfied, down 1 point and historically very low.,” the NFIB survey said.

“Thirty-three percent reported all credit needs met (down 1 point) and 51% said they were not interested in a loan, up 2 points. Only 1% reported that financing was their top business problem compared to 21% citing taxes, 16% citing regulations and red tape, and 19% the availability of qualified labor,” the survey said.

Twenty-nine percent of all small business owners reported borrowing on a regular basis, i.e. “at least every three months,” compared to 31% in September, the survey said. The high in the past five years was 33%, seen in August 2015.

The NFIB noted that “the average rate paid on short maturity loans was up 10 basis points at 5.6%, little changed even as the Federal Reserve raises rates.”

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Timothy Kelly
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