Small business loan approval percentages at big banks ($10 billion+ in assets) increased from 13.9% in August 2021 to 14% in September. Meanwhile, small banks’ approvals also rose in September to 19.5% from 19.3% in the month before, according to the latest Biz2Credit Small Business Lending Index™ released today.
“Business owners are investing in their companies, and banks are increasingly willing to lend. These are good signs for the small business economy,” said Rohit Arora, CEO of Biz2Credit, one of the nation’s leading experts in FinTech and small business lending. “Every category of lender, including bank and non-bank lenders, have seen their loan approval percentages rise every month during the past five months.”
Total nonfarm payroll employment rose by 194,000 in September, and the unemployment rate declined by 0.4 percentage points to 4.8 percent, the Bureau of Labor Statistics reported on Friday, Oct. 8. Notable job gains occurred in leisure and hospitality, professional and business services, retail trade, and in transportation and warehousing. Many of these jobs are created by small businesses.
Non-Bank Lenders’ Approval Percentages Rise
Institutional lenders approved grew to 24.5% in September, up from 24.3% of funding requests in August and up 2.3 percentage points from one year ago. Meanwhile, alternative lenders approved rose from 25.2% in August to 25.4% of funding applications in September 2021. Last year, the September percentage for alternative lenders was 23.1%. Credit unions approved 20.6% in September, up one tenth of a percent from August, but down from 21% in September 2020.
“Non-bank lenders are a viable source of funding for companies that need money quickly,” Arora added.
Biz2Credit analyzed loan requests from companies in business more than two years with credit scores above 680. The results are based on primary data submitted by more than 1,000 small business owners who applied for funding on Biz2Credit’s platform.