Big banks really have roared back into the small business finance marketplace.
New York, NY (PRWEB) October 07, 2014
Small business loan approval rates at big banks reached a post-recession high for the sixth consecutive month, according to the September 2014 Biz2Credit Small Business Lending Index, a monthly analysis of 1,000 loan applications on Biz2Credit.com. Small business loan approval rates at big banks ($10 billion+ in assets) rose to 20.6% in September from 20.4% in August.
Meanwhile, the percentage of loans granted by small banks slipped to 50.3% from 50.6% last month. In a year-to-year comparison, small business lending approval rates are up nearly 20 percent at big banks, while remaining almost stagnant at small banks.
“Big banks really have roared back into the small business finance marketplace,” said Biz2Credit CEO Rohit Arora, who oversaw the research. “As the economy continues its slow but steady rebound, small business optimism grows, and entrepreneurs are more willing to invest in their companies.”
Meanwhile, institutional lenders granted 59.5% of the funding requests they received in September, a slight increase from 59.4% in August. Lending approval rates by these institutional lenders has increased every month since Biz2Credit began monitoring this category of lenders in January 2014.
"We are seeing more creditworthy applicants get funding from institutional investors, whose interest rates are more attractive than those of other non-bank lenders,” explained Arora, one of the nation’s leading experts in small business lending.
At the same time, approval rates at alternative lenders -- merchant cash advance companies, factors, and other non-bank institutions -- slipped for the eighth consecutive month to 62.6% in September, from 62.7% in August. Credit unions granted 43.4% of loan applications in September, which matched its loan approval rate last month. However, a year-to-year comparison shows that lending approval rates at credit unions are down as they continue to be an afterthought by small business loan applicants.
To view the historic chart of the Biz2Credit Small Business Lending Index, visit http://www.biz2credit.com/small-business-lending-index/september-2014.
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 join on Facebook at http://www.facebook.com/biz2credit.