NEW YORK, July 11, 2023 (GLOBE NEWSWIRE) -- Small business loan approval percentages at big banks stayed at 13.4% in June, according to the latest Biz2Credit Small Business Lending Index™ released today. Meanwhile, small banks saw increased approval percentages for the first time since January 2023, going from 18.7% in May to 18.8% in June.
Approval percentages at non-traditional lenders continue to rise for the six-consecutive month this year. Institutional investors’ approval rates increased from 26.9% in May to 27.1% in June, while alternative lenders improved from 28.9% in May to 29.1% in June. Credit unions also increased from 19.8% in May to 19.9% in June.
Total nonfarm payroll employment increased by 209,000 in June, and the unemployment rate changed little at 3.6%, according to the Jobs Report released by the Bureau of Labor Statistics on Friday, July 7, 2023. Employment continued to trend up in government, health care, social assistance, and construction. Meanwhile, service industries, including restaurants, travel and tourism, and personal services are still struggling to find workers and have to pay higher wages to fill positions.
“While Fed tightening seems to be working still, the tight labor market will lead to further interest rate hikes and higher borrowing costs. This also increases the chances of the economy slipping into recession,” said Rohit Arora, CEO of Biz2Credit and one of the nation’s leading experts in small business finance. “Although revenues are strong, wage costs remain high. There’s only so much a restaurant can charge for a burger or a salon can charge for a haircut and expect customers to keep coming back at the same frequency.”
“Companies that are looking to hire and train staff and purchase inventory but don’t have enough cash on hand are having a hard time securing capital at a reasonable cost right now,” added Arora.
To determine its Small Business Lending Index, Biz2Credit analyzed loan requests from companies in operation for 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. To view the June 2023 Index, click here.
About Biz2Credit
Founded in 2007, Biz2Credit has arranged more than $7 billion in small business financing. The company is expanding its industry-leading technology in custom digital platform solutions for banks and other financial institutions, investors, and service providers. Visit www.biz2credit.com or Twitter @Biz2Credit, Facebook, and LinkedIn.
Contact: John Mooney, (908) 720-6057, john@overthemoonpr.com
