Credit union activity declined, with institutional lenders picking up the slack. The institutional approval rate of 61.8 percent was the highest rate among lending categories, a hair above the 61.0 percent rate posted by alternative lenders. The report says alternative lenders approval percentages have declined since the beginning of 2014, which is when institutional lenders began participating in the space.
“Alternative lenders like traditional MCA players are seeing continued customer acquisition as well as pricing challenges,” Mr. Arora explained. “Institutional lenders as a class of investors is growing the fastest as more long-term funding is entering the small business lending space. Institutional lenders are also getting into commercial real estate (CRE) and equipment financing within the small business lending landscape.”
Big banks, defined in the report as those with at least $10 billion in assets, approved 22.3 percent of small business loan requests, down one tenth of a point from July’s 22.4 pace.
The small bank approval rate also dropped a tenth, and now sits at 49.1 percent, making August the tenth consecutive month the segment has denied more than half of submitted loan requests.
Credit unions continued the losing a tenth trend. Their August approval rate sat at 42.8 percent.