New York, NY (PRWEB) December 11, 2013 -- Small business loan approvals at big banks ($10 billion+ in assets) increased to 17.4% in November 2013 from 14.3% in October, 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, lending approval rates at big banks have increased more than 30 percent.
“Big banks have begun to feel the pressure to lend more money with the Dodd-Frank reform bill nearing and we should expect to see more changes accordingly in the next year,” said Biz2Credit CEO, Rohit Arora, who oversaw the research.
Additionally, small business loan approvals at small banks increased from 44.3% in October to 49.7% in November. More importantly, approval rates at banks both large and small have returned to pre-government shutdown levels in September, as the IRS and SBA are catching up on the backlog of loan applications.
“The refinancing boom at big banks has waned, and their distribution strength will soon fade as branch networks are losing money. Big banks must begin to focus on improvements in other areas such as technology,” added Arora, one of the nation’s leading experts on small business finance. “It's still puzzling why many banks and credit unions still do not offer online small business applications to streamline the process. This would benefit both the financial institutions and the loan applicants.”
Meanwhile, credit unions, which had been on the lending rebound prior to the government shutdown, also experienced a slight increase in approval rates in November. Approval rates at credit unions improved to 44.5%, from 43.4% in October, but they are still down nearly 10 percent in a year-to-year comparison.
Alternative lenders continue to thrive in small business lending. Approval rates by alternative lenders dropped slightly to 67.2% in November 2013, down from 67.3% the previous month.
“The popularity of alternative lending continues to increase as the desperation of small business owners to acquire capital becomes more urgent and because alternative lenders' interest rates have dropped considerably," Arora explained. "The vast majority of alternative lenders are no longer 'legalized loan sharks,’ as was frequently the case a few years ago. New players continue to enter the small business lending market.”
Arora expects that funding approval rates will climb in December and beyond as more pressure from Dodd-Frank is expected in the coming months.
To view the historic chart of the Biz2Credit Small Business Lending Index, click here. http://www.biz2credit.com/small-business-lending-index/november-2013.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 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.
John Mooney, Over The Moon PR, +1 (908) 720-6057, [email protected]
SOURCE Over The Moon PR