Small business loan approvals at big banks improved again last month to reach another post-recession high. According to the Biz2Credit Small Business Lending Index, big banks approved 25 percent of small business loan applications in October 2017, up two-tenths of a percent from the previous month’s high.
Biz2Credit Lending Index October 2017
“Big bank lending to small business continues to climb to the point that one-in-four loan applications are approved. During the darkest point of the post-recession credit crunch, they granted less than one-in-ten requests. We have come a long way,” said Biz2Credit CEO Rohit Arora, who oversaw the research.
In September, Biz2Credit’s monthly analysis of loan approval rates at big banks saw approval reach 24.8 percent of small business funding requests.
“The big banks are making a lot of traditional small business loans, which take less time to process than SBA loans. They also are granting a lot of working capital requests,” Arora added.
Part of the reason big banks are approving a lot of loan requests is because of stock markets that continue to perform well, Arora says. Trump’s tax cut plan is also viewed as good news for business owners.
Meanwhile, small banks’ loan approvals for small businesses dropped slightly last month.
Small Bank Loan Approval Percentages
At small banks, approval percentages dipped to 48.9 percent in October from 49.1 percent the previous month.
“Despite a drop in approval percentages, small banks are still processing a large number of SBA-backed loans,” Arora said. “Nearly half of the funding requests by small businesses at small banks are approved.”
Loan approval rates among alternative lenders also dipped two-tenths of a percent to 56.8 percent in October. Credit unions’ loan approval rates also dropped a tenth of a percent to 40.2 percent, a new low point for lenders in this category.
Institutional lenders, however, approved a whopping 64 percent of small business funding requests, which is a new high for the category in the Biz2Credit Small Business Lending Index.
Now Is a Good Time to Request a Business Loan
The Biz2Credit Small Business Lending Index analyses more than 1,000 small business loan applications on Biz2Credit.com, providing a useful monthly index of small business loan approval rates. This year’s lending indexes indicate now is a good time to request a business loan from banks.
“Entrepreneurs have a better chance of obtaining funding now than at any other time in the past decade,” says Arora who’s recognized as one of the country’s leading experts in small business finance.