According to the latest Biz2Credit Small Business Lending Index, small business loan approval percentages at big banks fell from 14.6% in November to 14.5% in December and tied with January’s lowest monthly approval rate in 2022.
Approval percentages of business loan applications at small banks rose marginally from 21.1% in November to 21.2% in December. Meanwhile, credit unions saw a decrease in approvals, dropping from 20.3% in November to 20.2% in December.
Approval percentages of alternative lenders increased from 27.4% in November to 27.6% in December among non-bank lenders. Institutional investors approved 25.9% in December, up from 25.8% in November.
“It is currently a tough time to get small business loans from big banks,” Rohit Arora, CEO of Biz2Credit, said. “Many small business owners are waiting to see if interest rate increases will end in early 2023. Meanwhile, the ones that have applied for loans were not very successful in securing them.”
As we look at 2022, big bank small business loan approval percentages rose, then steadily declined where the figure in December was the same as it was last January. Meanwhile, small bank approval rates inched up ever so slightly, but they are still far below pre-pandemic levels. Institutional Investors and Alternative Lenders were slightly up in 2022. Credit unions in December recorded their second lowest total ever since Biz2Credit began reported loan approval percentages in 2011. Overall, it was a tough year for small businesses looking to secure financing.”
According to the Jobs Report released by the U.S. Bureau of Labor Statistics on Jan. 6, total nonfarm payroll employment increased by 223,000 in December and the unemployment rate edged down to 3.5%. Gains occurred in leisure and hospitality, health care, construction and social assistance.
