Small banks and non-bank lenders show growth, says Biz2Credit Lending Report

Loan approval rates are down slightly at large banks and credit unions, but the loan approval rate continues to slowly increase at smaller banks and nonbank lenders, according to the Biz2Credit Loan Report for August.

Biz2Credit Small Business Loan Index September 2022

“General conditions are getting tighter and big banks are taking more provisions now,” said Rohit Arora, CEO and co-founder of Biz2Credit, and one of the nation’s leading small business lending and fintech experts. “As smaller banks are more active in SBA lending, their approval rates are still high as demand for government-backed products is high.”

Biz2Credit is an online lending platform that publishes monthly loan approval rate reports. The report is based on loan applications from 1,000 small business owners. The report includes loan approval rates through August 2022.

August Biz2Credit Small Business Lending Index Key Data

Big banks

Loan approval rates at big banks (those with more than $10 billion in assets) fell to 15.1%, down from July’s 15.5% approval rating . This is the first decline since February 2022. Since March, major banks have seen a steady 0.1% monthly increase in their approval rating. Two years ago, loan approval rates for major banks were 28.3%.

Small banks

The approval rating for small banks rose to 21.4% in August, from 21.1% in July and 20.0 in June. Two years ago, the loan approval rate for small banks was 50%.

Institutional lenders

Institutional lenders recorded an approval rate of 25.9% in August, up from 25.6 in July. Institutional lenders had seen a steady 0.1% approval rate since January before August’s 0.3% increase. Two years ago, the lending rate for institutional lenders was 66.5%.

Alternative lenders

Approval rates for alternative lenders rose to 27.3% in August from 27.1% in July. Two years ago, the loan approval rate for alternative lenders was 55.9%.

credit unions

Credit union loan approval rates fell to 20.3% in August. Credit union rates had held steady at 20.6% for several months before dropping to 20.5% in July. Two years ago, the credit union loan approval rate was 39.6%.

How Biz2Credit compiles the report

Biz2Credit analyzes loan applications from companies that have been in business for more than 2 years and also have a credit score of 680 points or higher. Biz2Credit compiles data from over 1,000 companies to prepare the report.

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