Small business loan approval percentages at big banks with more than $10 billion in assets and small banks dropped slightly in August 2020, an indication that the upward trend that began in May has plateaued, according to the Biz2Credit Small Business Lending Index.

“PPP loans came to a halt on August 8, and it has been tough to secure traditional small business funding in the coronavirus era,” Rohit Arora, CEO of Biz2Credit, said. “Big banks hit a record low approval rate of 8.9% in April and were slowly rebounding, but the curve flattened last month.”

In August, big banks granted only 13.6% of the loan applications they received compared with 13.8% in July. Similarly, small banks approved 18.5% of funding requests, a small dip from 18.6% the previous month.

“The discouraging part is that the trend over the past several months had been positive. Now it seems to have leveled off,” Arora said. “It’s a wait-and-see attitude — especially when some businesses are not yet operating at full capacity.”

The Biz2Credit Small Business Lending Index figures do not reflect approval of Paycheck Protection Program (PPP) loans that are made by the government rather than by the banks themselves. PPP lending ended on Aug. 8 after providing nearly 5 million small businesses with an infusion of much needed cash, which will likely be “forgivable loans” in most cases. Now that the program has ended, many small business owners are hoping that Congress will pass PPP2 legislation to help continue the flow of capital to America’s small businesses.

The U.S. Bureau of Labor Statistics’ Jobs Report on Sept. 4 found that nonfarm payroll employment rose by 1.4 million in August, while the unemployment rate fell to 8.4%. These improvements in the labor market reflect the continued resumption of economic activity that had been curtailed due to the coronavirus pandemic and efforts to contain it. Notable job gains in the private sector occurred in retail, in professional and business services, in leisure and hospitality, and in education and health services. Many of those jobs are created by small businesses.

Loan approval rates among alternative lenders dropped a notch from 23.1% in July to 23% in August. Likewise, credit unions also slipped one-tenth of a percent from 21.2% in July to 21.1% in August.

Institutional lenders were the only category of lender that saw an uptick in approval percentages during August, as approvals rose from 21.9% in July to 22% in August.

“Institutional lenders saw only a slight gain,” Arora said. “Overall, it was a tough month for small business borrowers who are assessing their next move as they try to forge a path forward.”