June 20, 2024

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Small Banks and Non-Bank Lenders Show Growth, According to Biz2Credit Lending Report

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Loan approval rates are down slightly at Big Banks and Credit Unions, but the loan approval rate continues to slowly rise at small banks and non-bank lenders, according to the Biz2Credit Lending Report for August.

Biz2Credit Small Business Lending Index September 2022

“The overall conditions are tightening, and big banks are taking more provisions now,” said Rohit Arora, Biz2Credit CEO and co-founder, and one of the nation’s leading experts in small business lending and fintech. “Since smaller banks are more active in SBA lending, their approval rates are still strong as demand for government-guaranteed products is high.”

Biz2Credit is an online lending platform that reports monthly on loan approval rates. The report is based on loan applications from 1,000 small business owners. The report includes loan approval rates through August 2022.


Key Data from the August Biz2Credit Small Business Lending Index

Big Banks

Loan approval rates at Big Banks (those with more than $10 billion in assets) declined to 15.1%, a decrease from the 15.5% approval rating in July. It’s the first decrease since February 2022. Since March, Big Banks had seen a steady .1% monthly approval rating increase. Two years ago, the loan approval rates for Big Banks were 28.3%.

Small Banks

The approval rating for Small Banks grew to 21.4% in August, an increase from 21.1% in July and 20.0 in June. Two years ago, the loan approval rate from Small Banks was 50%.

Institutional Lenders

Institutional Lenders saw an approval rate of 25.9% in August, an increase from 25.6 in July. Institutional Lenders had seen a steady .1% approval rate since January before the .3% increase in August. Two years ago, the loan rate for Institutional Lenders was 66.5%.

Alternative Lenders

Alternative Lenders’ approval rates rose to 27.3% in August, an increase from 27.1% in July. Two years ago, the loan approval rate for Alternative Lenders was 55.9%.

Credit Unions

Credit Union loan approval rates dropped to 20.3% in August. Credit Union rates had remained steady at 20.6% for several months before dropping to 20.5% in July. Two years ago, the loan approval rate from Credit Unions was 39.6%.

How Biz2Credit Compiles the Report

Biz2Credit analyzes loan requests from businesses that have been in business for more than 2 years, and which also have 680 points or higher credit rating. Biz2Credit compiles data from more than 1,000 businesses to prepare the report.

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