Biz2Credit: Small Business Loan Approval Rates Rise at Banks in July
According to Biz2CreditAccording to the latest Small Business Lending Index, small business loan approval percentages at large banks (over $ 10 billion in assets) fell from 13.6% in June to 13.8% in July, reaching the same percentage as last July. At the same time, approval rates for small banks also increased, from 18.9% in June to 19.1% in July. The approval percentage at small banks is up half a percent from last July.
“Overall, the economy has rebounded quite well and many small businesses are re-investing in their businesses,” said Rohit Arora, CEO of Biz2Credit. “Approval rates have increased in both large and small banks, including regional and community banks which are increasingly partnering with fintechs to digitize the small business loan application process. .
“The big banks are still relatively stingy when it comes to lending to small businesses. This opens up opportunities for small banks and alternative lenders to gain market share. “
Institutional lenders approved 23.9% of small business loans in July, up a tenth of a percent from 23.8% of financing requests in June and up two percentage points from one year ago. Meanwhile, approval rates for alternative lenders rose two-tenths of a percent, from 24.5% in June to 24.7% in July. Last year, the July percentage for alternative lenders was 23.1%. Credit unions approved 20.5% in July, the same percentage as the previous month but down from 21.2% in July 2020.
“Non-bank lenders are a viable source of capital for small business owners, including women-owned and minority businesses,” Arora said. “Non-bank lenders generally focus less on FICO scores and more on the financial health of borrowers seeking financing.”
Biz2Credit analyzed loan applications from businesses that have been in business for more than two years with credit scores over 680. The results are based on primary data submitted by over 1,000 small business owners who have applied for financing. on the Biz2Credit platform.