NEW YORK (Press Release – December 7, 2011) – The Biz2Credit Small Business Lending Index, an analysis of 1,000 loan applications on Biz2credit.com, found that approval rates of small business financing requests by small banks and non-bank lenders increased to their highest levels of the year during November 2011.
The big story in small business lending continues to be the activity of alternative lenders — credit unions, as well as Community Development Financial Institutions (CDFI), micro lenders, and others — approved 62% of funding requests in November, a rise from the 61.8% during October. Credit unions, which have become increasingly active in small business lending in 2011, granted 57% of small business funding requests, up from 56.6% in October. Loan approvals by small banks increased to 47% in November, their highest rate this year and an increase from 46.3% in October. Approvals by large banks also rose, reaching 10% for the first time since April.
Big Bank ($10B+ assets) Lending %, Small Bank Lending %, Credit Union Lending %
January 12.8%, 43.5%, 48.9%
February 11.9%, 43.9%, 49.1%
March 11.6%, 44.2%, 48.8%
April 10.4%, 44.6%, 50.1%
May 9.8%, 45.0%, 51.2%
June 8.9%, 42.5%, 52.3%
July 9.8%, 44.9%, 53.4%
August 9.4%, 43.8%, 54.2%
September 9.2%, 45.1%, 55.5%
October 9.3%, 46.3%, 56.6%
November 10.0%, 47.0%, 57.0%
“Optimism seems to be returning. We have seen an increase in the sheer volume of loan applications, which is a good sign,” said Biz2Credit CEO Rohit Arora, named “Top Entrepreneur of 2011” by Crain’s New York Business and one of the country’s top experts on small business finance. “The strong start of the holiday shopping season combined with the latest jobs report showing that the U.S. unemployment rate fell to 8.6% in November — its lowest level in 2 1/2 years — indicates that brighter days may be ahead.”
“The biggest story is the continued aggressiveness of credit unions in small business lending. National Association of Federal Credit Unions (NAFCU), reported that credit unions upped loan-making by 4.5% in the 12 months ending in June 2011, and we have seen increases in subsequent months,” Arora added.
“Additionally, banks with assets between $10- $50 billion are starting to coming back in the market, albeit cautiously. They are continuing to monitor the European financial crisis, as well as the debt battle in Congress. National and international issues impact big banks more than smaller lenders
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 400 lenders nationwide.
Founded in 2007, Biz2Credit is a leading credit marketplace connecting small- and medium-sized businesses with lenders, service providers, and complimentary 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 6 million users, 450+ lenders, credit rating agencies such as D&B and Equifax, and small business service providers including CPAs and lawyers. Having secured more than $500 million in funding throughout the U.S., Biz2Credit is widely recognized as the #1 credit resource for small businesses.