Small Business Loan Approval Rates Drop in November

The loan approval rate decreased at big banks, small banks and credit unions during November, according to the Biz2Credit Lending Report released in December.

The Loan Approval Rate for Alternative Lenders and Institutional Investors increased slightly, by .1% for each.

biz2credit lending report november 2022

Small Business Loan Approval Rates – November 2022

Biz2Credit CEO and co-founder Rohit Arora said the lending index numbers show that small businesses are keeping an eye on the economy before they seek a loan.

“With seemingly ever rising interest rates, small businesses are taking a wait-and-see approach to borrowing,” Arora said. “All eyes will be on what the Federal Reserve announces at its next meeting on Dec. 14.”

“Most experts anticipate another 25bps increase in interest rates,” Arora added. “While rates continue to rise, the economy has not yet reaped the benefits of tighter monetary policy as a means to curb inflation.”

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

The December report includes loan approval rates through November 2022.

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

Big Banks

Loan approval rates at Big Banks (those with more than $10 billion in assets) declined to 14.6% in November. The loan approval rates at Big Banks have decreased since August 2022.

Two years ago, the loan approval rates for Big Banks were 28.3%.

Small Banks

The approval rating for Small Banks declined to 21.1% in November. The high for the small bank approval rating during the past year was in August, at 21.4%.

Two years ago, the loan approval rate from Small Banks was 50%.

Institutional Lenders

Institutional Lenders approval rates increased to 25.8%, a .1% increase since October.

Two years ago, the loan rate for Institutional Lenders was 66.5%.

Alternative Lenders

Alternative Lenders increased .1% to 27.4% in November. Over the past year, the loan approval rates for Alternative Lenders had dipped and risen about .2% each month.

Two years ago, the loan approval rate for Alternative Lenders was about 55%.

Credit Unions

Credit Union loan approval rate decreased to 20.3% in November, a .1% decrease since October.

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%.

Image: Biz2Credit

Lisa Price Lisa Price is a staff writer for Small Business Trends and has been a member of the team for 4 years. She has a B.A. in English with a minor in journalism from Shippensburg State College (Pennsylvania). She is also a freelance writer and previously worked as a newspaper circulation district manager and radio station commercial writer. In 2019, Lisa received the (Pennsylvania) Keystone Award.