Small-Business Loan Approvals Improving at Smaller Banks
According to the Biz2Credit index, loan approval rates for small businesses by small banks jumped for the fourth straight month in March, reaching a new high of 50.8%.
Its monthly analysis of 1,000 loan applications showed an improvement from the 50.3% mark in February 2013. The year-over-year comparison shows a bigger increase from the March 2012 figure of 47.6%. Small banks are defined as having less than $10 billion in assets.
However, small-business loan approval rates at big banks (with $10 billion or more in assets) decreased slightly in March 2013 to 15.7%, down from the 15.9% rate in February.
Despite the drop at big banks last month, approvals by these larger institutions are up 44% from the March 2012 figure of 10.9%.
“Smaller banks are becoming more aggressive in their SBA lending, especially via the SLA and SBA Express program loans,” said Biz2Credit CEO, Rohit Arora who oversaw the research.
“While big banks have been steadily approving more applications in recent months, uncertainty in the economy is preventing higher rates of approval,” he said. “Bigger banks are more impacted by external issues, such as the budget Sequester.”