NEW YORK, October 06, 2020 (GLOBE NEWSWIRE) – Small business loan approval percentages at big banks ($ 10 billion and more in assets) fell slightly from 13.6% in August to 13.5% in September, indicative of the difficulties facing small businesses, according to the latest Biz2Credit Index of Small Business Loansâ¢ released today.
the Biz2Credit Index of Small Business Loans figures do not reflect the approval of SBA and Treasury approved Paycheck Protection Program (PPP) loans. PPP loans ended on August 8 after providing nearly 5 million businesses with $ 531 billion in what were to be âforgivable loansâ. However, so far, few borrowers have received confirmation that their PPP loans will not have to be repaid.
âThere is no doubt that it has become a challenge to secure traditional funding for small businesses in the age of the coronavirus,â said Rohit Arora, CEO of Biz2Credit, who oversees the monthly research. âMany companies take a wait-and-see approach until Congress passes so-called ‘PPP 2’ legislation. Even if PPP 2 is passed, business owners may not apply until they have received confirmation that their initial loans are canceled.
“It is not reasonable to expect companies to apply for financing before knowing if they are about to repay their first round of PPP financing,” added Arora, one of the leading national experts in small business financing. âIf they have to repay loans that they thought were forgiven by the government, they will not seek to borrow more. Unfortunately, many companies are at the life or death stage right now if they do not receive a capital injection. “
The October 2 employment report from the US Bureau of Labor Statistics found that non-farm payroll employment increased by 661,000 in September and the unemployment rate fell to 7.9%. These improvements in the labor market reflect the resumption of economic activity that had been severely curtailed due to efforts to contain the coronavirus pandemic (COVID-19). Job gains were in the recreation and hospitality industries, in retail trade, in health care and social assistance, and in professional and business services, according to the Bureau of Statistics. Many of these jobs are created by small businesses.
During the month of September, small banks approved 18.5% funding requests, unchanged from August. During this time, vsrepeat unions slipped by a tenth of a percent, from 21.1% in August to 21.0% in September.
Two categories of lenders increased slightly. Iinstitutional lenders saw an increase in approval percentages of 22.0% in August to 22.2% in September. Meanwhile, loan approval rates among alternative lenders increased by a tenth of a percent, from 23.0% in August to 23.1% in September.
About the Biz2Credit Small Business Loan Index
Biz2Credit analyzed loan applications from businesses that have been in business for more than two years with credit scores above 680. The results are based on primary data submitted by over 1,000 small business owners who have applied for financing on the Biz2Credit platform.
Founded in 2007, Biz2Credit has arranged over $ 3 billion in small business financing. The company extends its cutting-edge technology into customized digital platform solutions for banks and other financial institutions, investors and service providers. Visit www.biz2credit.com or Twitter @ Biz2Credit, Facebook and LinkedIn.
Media contact: John Mooney, (908) 720-6057, [email protected]