Small business loan approval rates at big banks (more than $10 billion in assets) rose from 14.5% in January to 14.7% in February, and approval rates at small banks (under $10 billion in assets) also increased, rising from 20.3% in January to 20.5% in February, according to Biz2Credit’s Small Business Lending Index.
Among several categories of non-bank lenders, approval percentages also climbed. Institutional lenders approved 25.2% of funding requests in January, up one-tenth of a percent from 25.1% in February. Alternative lenders’ approval rates rose from 26.3% in January to 26.5% in February. Credit unions remained stagnant at 20.7% in February.
“Two years ago, bank approval percentages were almost double what they are today for all categories of lenders,” Rohit Arora, CEO of Biz2Credit, said. “For instance, in February 2020, big banks approved 28.3% of loan requests, while small banks approved more than half (50.3%) of loan applications.
“Non-bank lender percentages in 2020 were even higher. Institutional lenders approved nearly two-thirds (66.5%) of small business loan requests, at the time an all-time high. Meanwhile, alternative lenders granted 55.9%, and credit unions approved 39.6%. We have a long way to go before we reach those marks again, if we ever do.”
Biz2Credit analyzed loan requests from companies in business more than two years with credit scores higher than 680 for the index. The results are based on primary data submitted by more than 1,000 small business owners who applied for funding on Biz2Credit’s platform.
