New York, NY (PRWEB) August 05, 2014
Small business loan approval rates at big banks hit a post-recession high for the second consecutive month, according to the July 2014 Biz2Credit Small Business Lending Index, the monthly analysis of 1,000 loan applications on Biz2Credit.com.
Small business loan approval rates at big banks ($10 billion+ in assets) rose to 20.1% in July from 20% in June, while approval rates at small banks slipped to 50.9% from to 51.4% last month.
“Big banks are becoming increasingly aggressive in small business lending and are adopting technology that makes them more efficient players,” explained Biz2Credit CEO Rohit Arora, who oversaw the research. “Because of their renewed focus on small business loans, larger banks are taking away higher quality customers from smaller competitors.”
Meanwhile, institutional lenders granted 59.3% of the funding requests they received in July, a slight increase from 59.2% in June.
“Institutional firms have roared into the small business segment and created fierce competition for other so-called alternative lenders,” added Arora, one of the nation's leading experts in small business lending.
“This competition is lowering the price of alternative lending products, which is good news for borrowers – particularly those whose credit scores are not high enough to qualify for loans from traditional banks.”
Approval rates at alternative lenders slipped for the sixth consecutive month to 62.9% in July, from 63.2% in June. Credit unions granted 43.5% of loan applications in June, down from 43.7% last month.
“The financial health of small businesses has improved over last 12 months thus creating a demand for more reasonably priced, longer term products which institutional players – insurance companies, credit funds, family funds, and other yield-hungry, non-bank financial institutions – can provide,” explained Arora.
“However, there is still room for improvement,” Arora added. The SBA still needs more to streamline its Small Loan Advantage program. In spite of verbal support by Maria Contreras-Sweet, the new SBA Administrator, we have still not seen much process improvement in this program with regards to acceptance of eSignatures and other technological advancements.”
To view the historic chart of the Biz2Credit Small Business Lending Index, visit https://www.biz2credit.com/small-business-lending-index/july-2014.html.
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.
Founded in 2007, Biz2Credit has arranged more than $1.2 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, 1,300+ 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.