Loan approval percentages down slightly at major banks and credit unions, but non-bank lenders show continued growth
NEW YORK, Aug. 09, 2022 (GLOBE NEWSWIRE) — Small Business Loan Approval Percentages at small banks fell from 21.1% in June to 21.2% in July, while approvals to big banks ($10M+ in assets) grew from 15.4% in June to 15.3% in July, according to the latest Biz2Credit Small Business Loan Index™ published today.
Among non-bank lenders, approval percentages improved slightly, while loan approvals from credit unions fell:
Iinstitutional lenders approved 25.8% credit applications in July, compared to 25.6% in June. Approvals in this lending category have steadily increased in 2022.
Alternative lenders approval rates fell from 27.1% in June to 27.2% in July.
credit unions fell from 20.5% in June to 20.4% in July.
“Big bank approvals fell slightly after months of steady increases. This is likely due to worries about a possible recession after the Federal Reserve raised interest rates by 75 basis points in an effort to control the economy. ‘inflation,” said Biz2Credit CEO Rohit Arora, one of the nation’s leading small business lending and fintech experts. “Small banks, which process a lot of SBA loans, remain a good source of capital For businesses that need cash faster, non-bank lenders are still a good option.
“Small business loans at credit unions continue to flounder,” Arora added. “Fortunately, their approval percentages are about half of what they were just before the pandemic and have shown little growth this year.”
Total non-farm payroll employment rose by 528,000 in July and the unemployment rate edged down to 3.5%, according to the US Bureau of Labor Statistics’ jobs report released on Friday 5 August 2022. Job growth was broad-based, led by gains in leisure and hospitality, professional and business services, and healthcare. Total nonfarm employment and the unemployment rate have returned to pre-pandemic levels in February 2020. Many of these jobs are being created by small businesses.
“Small business owners continue to have difficulty finding workers. The demand for labor is driving up wages, which is impacting the bottom line of many small businesses. Labor costs are usually a company’s largest expense,” says Arora. “Meanwhile, inflation remains high and is putting a financial crisis on small business owners.”
Biz2Credit analyzed loan applications from businesses that had been in business for 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 financing on the Biz2Credit platform. To view the report of July 2022, Click here.
Founded in 2007, Biz2Credit has arranged over $7 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.
Contact: John Mooney, (908) 720-6057, [email protected]