NEW YORK, May 14, 2019 (GLOBE NEWSWIRE) -- Approval rates for small business loan applications reached a record high of 27.5% at big banks ($10 billion+ in assets) in April, up one-tenth of a percent from March, while approval percentages at small banks jumped four-tenths of a percent to 49.8%.according to the Biz2Credit Small Business Lending Index™ released today.
“Approvals by banks of all sizes continue to climb. The economy is still strong, and small business optimism is high,” said Biz2Credit CEO Rohit Arora, who oversees the monthly research derived from more than 1,000 small business credit applications on his company’s online lending platform. “Small business lending is as strong as it has ever been in the 21st century’s post-recession era.”
Small bank approvals of small business loan applications climbed from 49.4% in March to 49.8% last month.
“After February, the SBA wants the previous year’s tax returns. Once taxes are filed, SBA lending, which is particularly important to small banks, picks up,” Arora explained. “The backlog is over, and small banks are lending.”
Meanwhile, in the Jobs Report released on May 5, the Labor Department reported that employment increased by 263,000 in April, while the unemployment rate declined to 3.6 percent. The industries with notable job gains were professional and business services, construction, health care, and social assistance. The NFIB Small Business Optimism Index increased in April to a historically strong level. This is an indication that small businesses continue to power the economy after being briefly shaken by January’s government shutdown, according to the NFIB.
Institutional lenders slipped a notch 65.3%, up a notch from 65.4% in March.
“Even with a little hiccup, institutional lenders are approving nearly two-thirds of the funding requests they receive,” Arora explained.
Loan approval rates among alternative lenders dropped one-tenth of a percent to 57.2% in April, down a notch from 57.3% in March.
“Alternative lenders have had a lot of losses, and there has been a bit of pull-back from them,” Arora said. “Banks are lending, and they can offer more attractive rates and terms than alternative lenders can. The banks are getting their applications from higher quality borrowers.”
Credit unions remained at a record low 40.1% of loan applications in April.
“Credit unions are beginning to look for FinTech partners to help them upgrade their technology,” added Arora, who oversees the Biz2Credit research. “They have to respond to the marketplace, and Millennials simply won’t take the time to walk in and become a member in order to fill out a loan application. Digitizing the process will help.”
About the Biz2Credit Small Business Lending Index
Biz2Credit analyzed loan requests ranging from $25,000 to $3 million from companies in business more than two years with an average credit score above 680. Unlike other surveys, the results are based on primary data submitted by more than 1,000 small business owners who applied for funding on Biz2Credit's online lending platform, which connects business borrowers and lenders.
About Biz2Credit
Founded in 2007, Biz2Credit has arranged more than $2 billion in small business financing and has several times been named to Crain’s New York’s Fast 50 and was recently ranked among the top 200 fast-growing companies on Deloitte's 2018 Technology Fast 500. Biz2Credit is expanding its industry-leading technology in custom digital platform solutions for leading banks and other financial institutions, investors and service providers in the U.S. Visit www.biz2credit.com or follow Biz2Credit on Twitter: @Biz2Credit, Facebook, and LinkedIn.
Media Contact: John Mooney, (908) 720-6057, john@overthemoonpr.com