The analysis of more than 1,000 small business loan applications on Biz2Credit happens each month.
Small business loan approval rates inched up 20 basis points to 24.8 per cent, just over half of the 49.1 per cent approval rate at big banks.
“If you are seeking small business loans, you have a better chance now at securing funding than at any other time since the Great Recession,” Biz2Credit CEO Rohit Arora said. “Big banks are approving nearly a quarter of the applications they receive from small businesses. Small banks are doing a lot of SBA loans, and institutional lenders are on the rise. The small business credit market is robust at the moment for anyone who has a decent credit history.”
“Big banks are approving nearly a quarter of the applications they receive from small businesses. Small banks are doing a lot of SBA loans, and institutional lenders are on the rise. The small business credit market is robust at the moment for anyone who has a decent credit history.”
Institutional lender loan approval rates also set a new high at 63.9 per cent.
“Now that President Trump’s tax proposal has been unveiled, business owners are hoping that the cuts will further stimulate economic growth,” Mr. Arora added. “The stock markets are strong, jobs are being created, and oil prices have dropped further. All of these factors instil confidence in business owners who are contemplating start-up or expansion financing.”
Alternative lender loan approval rates continued their decline of more than a year, dropping 10 basis points to 57 per cent.
“Alternative lenders still play a valuable role in small business finance because they provide funding to businesses with poor credit scores or no credit history at all,” Mr. Arora said. “They make quick decisions and accept higher levels of risk. However, they charge higher rates than other types of lenders.”
Credit union loan approval rates remained at the lowest rate tracked by the survey, 40.3 per cent.
“Credit unions still lag behind other types of lenders in their technological upgrades, and they are still handcuffed by the credit union member business-lending (MBL) cap, unfortunately,” Mr. Arora said. “It’s an ongoing issue for them.”
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