Small Business Loan Approval Rates Continue to Rise at All Lenders

small business loan approval rates rise at all lenders

Loan approval rates from all types of lenders are rising, slowly, according to the Biz2Credit Small Business Lending Index for December 2021.

Institutional Lenders, Big Banks, Small Banks, Credit Unions and Alternative Lenders all saw modest growth in loan approvals from November 2021 to December 2021.

Alternative Lenders saw the strongest growth, a modest gain from 25.8% in November to 26.1% in December.

Alternative Lenders

Why did Alternative Lenders lead the way in loan approvals?

“After PPP, bank activity in small business lending has been slow,” said Rohit Arora, Biz2Credit CEO. “However, with government lending programs ending and interest rates expected to rise, it will become more lucrative for banks to lend again.”

Big Banks

Big Banks (those with more than $10 billion in assets) inched up to a 14.3% approval rating, from 14.2% in November.

Small Banks

The approval rating for Small Banks grew to 20.1% in December, compared to 19.9% in November.

Is the growth for both Big and Small Banks encouraging? Yes and no. Although the loan approval rates are slowly and steadily growing, with no decreases throughout the year, the increases pale in comparison to statistics from 2 years ago. 

Arora pointed out that 2 years ago, Big Bank approvals were at 28.2% while Small Bank approvals were at 50.6%.

“Normalcy has not returned because the virus hasn’t allowed it,” Arora said. “We thought with vaccination that Covid would lessen as a problem, but that didn’t happen.”

Institutional Lenders

Institutional Lenders saw an approval rate rise incrementally from 24.8% in November to 24.9% in December.

Together, Institutional Lenders and Alternative Lenders approved 51% of the small business loan applications.

Credit Unions

Credit Union loan approval rates stayed the same from November to December, at 20.6%.

How Biz2Credit Compiles the Report

Biz2Credit analyzes loan requests from small businesses which have been in business for more than 2 years. To be included, the small businesses much also have a credit rating of 680 points or higher. Biz2Credit compiles data from more than 1,000 businesses to prepare the report. For more information, go to

Image: Depositphotos

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.