Small business loans are becoming more attractive in today’s business climate as indicated by the Biz2Credit Small Business Lending Index, October 2015.
Big banks, with $10 billion or more in assets, are increasing the percentage of their overall loans to small businesses.
“As interest rates start going up, we expect further increase in the Big Banks appetite for small business loans. Big Banks are also warming up to buy more loans from the marketplace lenders,” said Rohit Arora, CEO of Biz2Credit.
While big banks are increasing the percentage of their overall loans to small businesses, institutional lenders (consisting of credit funds, family offices and hedge funds) have also upped their game in this area with a 0.2 percent raise. This marks the 13th consecutive month of growth in small business loan approval for this category of lender.
Small banks, though, are still mired in the mud. Their rate of loan application approval for small business remained fixed for the month of October 2015 at 49 percent, which is the same as September’s.
“Small Banks have been slow to adapt to new ways of lending in the small business space, especially incorporating online platforms, and thus their approvals have started to slide down,” said Rohit Arora, CEO of Biz2Credit.
Biz2Credit calculates these statistics monthly by analyzing one thousand loans completed during each month.
Biz2Credit was founded in 2007 and is backed by Nexus Venture Partners. It has also formed a partnership with Customers Bank, announced October 2015, which gave it a new platform that will allow the bank’s small business customers to apply for loans, upload documents, etc. for businesses that have operated for over six months.
Biz2Credit has become a leader in the online market for small business funding. It has arranged over a billion in funding for thousands of small businesses throughout the U.S.