"Overall, the availability of small business capital has improved over the past 12 months, which is always a good sign, but the flow of capital may be slowing, which is a cause of concern," said Rohit Arora, CEO of Biz2Credit.
New York, NY (PRWEB) April 11, 2012
The Biz2Credit Small Business Lending Index, an analysis of 1,000 loan applications on Biz2credit.com, found that loan approvals by big banks dropped to 10.9% from the 11.7% figure reported in February (a 6.8% decline over a one-month period) and from the 11.6% approval rate last March. Meanwhile, small bank lending remained flat at 47.6% in March 2012.
Alternate lenders picked up by 0.5% to a 63.0% approval rate in March as lower interest rate products have increasingly been introduced into the marketplace.
Loans made by credit unions increased 0.1% to a 57.9% approval rate at a time when Senator Mark Udall (D-CO) introduced legislation that would raise the cap on credit unions' loan-making from 12.25% to 27.5% of their assets. Senate members are expected to vote on the bill in April.
"The disappointing March jobs report in which only 120,000 new jobs were created -- when the expectation was much higher -- shows that we're not out of the woods yet. The rising price of oil will make both borrowers and lenders proceed with caution. Overall, the availability of small business capital has improved over the past 12 months, which is always a good sign, but the flow of capital may be slowing, which is a cause of concern," Arora added.
Credit unions and alternative lenders approve more than 50% of loan requests, while small bank lending has been inching up over the past year. Big banks are still stringent in their loan parameters and approve loans at a lower rate than any other category of lender, despite promoting their efforts in the small business lending space.
Biz2Credit's analysis also found that loan request amounts ranged from $25,000 to $3 million; that the average credit score was above 680, and that average-time-in-business was slightly more than two years.
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.
About the Biz2Credit Small Business Lending Index
The Biz2Credit Small Business Lending Index differs from other indices by analyzing required information (primary data) submitted by small business owners applying for financing through Biz2Credit’s online platform, which connects borrowers with more than 1,100 lenders nationwide.
Founded in 2007, Biz2Credit is a leading credit marketplace connecting small- and medium-sized businesses with lenders, service providers, and complementary business tools. The company matches borrowers to financial institutions based on business’ unique profile -- completed in less than four minutes -- in a safe, efficient, price-transparent environment. Biz2Credit’s network consists of 1.6 million users, 1,100+ lenders, credit rating agencies such as D&B and Equifax, and small business service providers including CPAs and lawyers. Having secured more than $550 million in funding throughout the U.S., Biz2Credit is widely recognized as the #1 online credit resource for small businesses.