Banks, both large and small, are becoming more aggressive in small business lending since it has proven to be a profitable part of their portfolios.
New York, NY (PRWEB) September 10, 2013
Small business loan approvals at big banks ($10 billion+ in assets) jumped to an all-time index high of 17.6% in August 2013 from 17.4% in July, according to the Biz2Credit Small Business Lending Index, a monthly analysis of 1,000 loan applications on Biz2Credit.com.
In a year-to-year comparison, big bank approval rates have increased by more than 62 percent from the 10.9% approval rate in August 2012. It is the second straight record month for loan approvals by big banks.
Small banks granted more loan requests than they rejected. Approval rates rose to 50.7% in August from 49.4% in July. Credit union lending also improved slightly to 45.3% in August, up from 45.1% last month. It is the second consecutive month of increases for credit unions after more than a year of declines. Alternative lender approvals of small business loans dropped to 63.1% in August from 63.2% in July.
"Banks, both large and small, are becoming more aggressive in small business lending since it has proven to be a profitable part of their portfolios," said Biz2Credit CEO, Rohit Arora who oversaw the research. "Additionally, banks typically attract higher quality borrowers than credit unions and alternative lenders, so they are becoming more apt to grant loan requests. Five years after the Great Recession, small business lending landscape is better than at any time since 2008."
"The resurgence of small business loan-making at traditional banks is impacting alternative lenders, who generally charge higher interest rates," Arora explained. "Borrowers would rather apply to banks with brand names that they trust, particularly since they are easing their lending criteria and granting more loans than at any time since the recession."
To view the historic chart of the Biz2Credit Small Business Lending Index, CLICK HERE.
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 with more than 1,200 lenders nationwide.
Founded in 2007, Biz2Credit has arranged more than $1 billion in small business funding throughout the U.S. and is widely recognized as the #1 online credit resource for startup loans, lines of credit, equipment loans, working capital and other funding options. Using the latest technology, Biz2Credit matches borrowers to financial institutions based on each company's unique profile -- completed in less than four minutes -- in a safe, efficient, price-transparent environment. Biz2Credit’s network consists of 1.6 million users, 1,200+ lenders, credit rating agencies such as D&B and Equifax, and small business service providers including CPAs and lawyers. Visit http://www.biz2credit.com, follow on Twitter @Biz2Credit, and Facebook at http://www.facebook.com/biz2credit.