Business Loan Approval Rates Show Slight Increase in May, according to Biz2Credit Report
Biz2Credit Small Business Lending Index June 2022 Loan approval rates continue to slowly rise, with Big Banks and Small Banks seeing the strongest growth during May. “The continued incremental increase in loan approval percentage is encouraging,” said Biz2Credit CEO Rohit Arora.
Aurora noted that the majority of small business loan funding comes at variable rates. As interest rates rise, that could lead to increasing the cost of borrowing capital for small businesses, he added.
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 report includes loan approval rates through May 2022.
Key Data from the May Biz2Credit Small Business Lending Index
Here are some insights from the latest Biz2Credit Small Business Lending Index:
Big Banks (those with more than $10 billion in assets) reached a 15.3% approval rating. That follows a steady increase: 15.1% during April, 14.9% approval rating during March, up from 14.7 in February and 14.5% in January.
Two years ago, the loan approval rates for Big Banks were 28.3%.
The approval rating for Small Banks grew to 20.9% in May, up from 20.8 percent in April. Rates were 20.6% in February.
Two years ago, the loan approval rate from Small Banks was 50%.
Institutional Lenders saw an approval rate rise a tenth of a point, to 25.5% in May. Past rates were 25.1% in January, 25.2% in February, 25.3% in March and 25.4% in April.
Two years ago, the loan rate for Institutional Lenders was 66.5%.
Alternative Lenders approval rates rose from 26.8% in April to 26.9% in May. Rates were 26.6% in March.
Two years ago, the loan approval rate for Alternative Lenders was 55.9%.
Credit Union rates remained steady at 20.6%. The credit union loan approval rates have remained at the position for several months, within a tenth of a point.
Two years ago, the loan approval rate from Credit Unions was 39.6%.
How Biz2Credit Compiles the Report
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.
This article, “Business Loan Approval Rates Show Slight Increase in May, according to Biz2Credit Report” was first published on Small Business Trends