Big banks continue to believe in the potential of small businesses.
The latest Biz2Credit Small Business Lending Index reveals small business loan approval at big banks improved to 24.1 percent in February 2017. This marks the seventh consecutive month of increases and the eleventh time in a calendar year that approval percentages have increased.
Biz2Credit Lending Index February 2017
Big Banks Approved More Small Business Loans
According to the index, loan approval rates at big banks in a year-to-year comparison are up more than one full percentage point.
“There is a confidence in the economy right now, and that is translating to higher loan approval rates at mainstream lending institutions,” said Biz2Credit CEO Rohit Arora, who oversaw the research.
“Small business owners are optimistic that there are bright days ahead and are applying for capital to invest in growing their businesses.”
Significantly, institutional lenders’ loan approval rates also grew. The report shows they improved to 63.5 percent, reaching a new Index high.
Lending Low and Stagnant Elsewhere
Lending approval rates at small banks, however, dropped for the first time in the last six months. Loan approval rates declined by one-tenth of a percent to 48.8 percent.
Likewise, lending approval rates at alternative lenders saw a decline. In February 2017, alternative lenders approved 58.4 percent of the loan requests they received, down from 58.5 percent in January.
Loan approval rates at credit unions remained stagnant at 40.8 percent.
For its monthly index, Biz2Credit analyzes 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 and lenders.