Small business loan approval percentages at banks with $10 billion or more in assets dropped slightly from 13.6% in August to 13.5% in September, which is indicative of the struggles that small businesses are facing, according to the latest Biz2Credit Small Business Lending Index.

The Biz2Credit Small Business Lending Index figures do not reflect approval of Paycheck Protection Program (PPP) loans approved by the SBA and the Treasury. PPP lending ended on Aug. 8 after providing nearly 5 million companies with $531 billion in what were expected to be “forgivable loans.” However, thus far, few borrowers have received confirmation that their PPP loans won’t have to be paid back.

“There’s no doubt that it has become a challenge to secure traditional small business funding in the coronavirus era,” Rohit Arora, CEO of Biz2Credit, said. “Many companies are taking a wait-and-see approach until Congress passes so-called “PPP 2” legislation. Even if PPP 2 is enacted, business owners may not apply until they receive confirmation that their initial loans are forgiven.

“It’s not reasonable to expect that firms will apply for funding before they find out whether they are on the hook for repaying their initial round of PPP funding. If they must repay loans they thought would be absolved by the government, they won’t look to borrow more. Unfortunately, many businesses are at a life-and-death stage right now if they do not get an infusion of capital.”

The U.S. Bureau of Labor Statistics’ Jobs Report on October 2 found that nonfarm payroll employment rose by 661,000 in September, and the unemployment rate declined to 7.9%. These improvements in the labor market reflect the resumption of economic activity that had been severely curtailed due to efforts to contain the coronavirus (COVID-19) pandemic. Job gains occurred in leisure and hospitality, in retail trade, in health care and social assistance, and in professional and business services, according to the Bureau of Statistics. Many of those jobs are created by small businesses.

During the month of September, small banks approved 18.5% of funding requests, which was unchanged from August. Meanwhile, credit unions slipped one-tenth of a percent from 21.1% in August to 21.0% in September.

Two categories of lenders rose slightly. Institutional lenders saw an uptick in approval percentages from 22% in August to 22.2% in September. Meanwhile, loan approval rates among alternative lenders increased one-tenth of a percent from 23% in August to 23.1% in September.

Biz2Credit analyzed loan requests from companies in business more than two years with credit scores above 680. The results are based on primary data submitted by more than 1,000 small business owners who applied for funding on Biz2Credit’s platform.