NEW YORK, July 14, 2020 (GLOBE NEWSWIRE) – The percentage of approval for small business loan applications in big banks (over $ 10 billion in assets) rebounded just 11.5% in May to 13.5% in June, according to the Biz2Credit â„¢ Small Business Loan Index released today.
June’s figure is still well below the record rate of February 2020 before the coronavirus pandemic became mainstream. The figures do not reflect the approval of Wage Protection Program (PPP) loans, which are made by the government rather than the banks themselves.
“Big banks, small banks and all other categories of lenders saw their approval percentages increase in June,†said Rohit Arora, CEO of Biz2Credit, which oversees the monthly research. “In the northeast, the economy is starting to reopen and there are signs of hope. However, it will be necessary to see how the spread of the pandemic impacts the south and west of the country. The coronavirus has made things difficult for small businesses around the world. “
“The jump of more than 2% was a solid performance for lending to big banks,†added Arora, one of the country’s leading experts on small business lending. “The July 2 jobs report reported that unemployment fell in June. This is a good sign, but the economic fluctuations continue as we enter the second half of 2020. â€
Approval rate at small banks climbed to 18.4% in June, against 16.9% in May. In February 2020, small business loan approvals were a solid 50.3%.
“Although small banks process a lot of PPP loan applications, they still approve non-PPP requests,†Arora said. “Regional and community banks play a big role in the survival of small businesses. “
As of June 30, the PPP loan program has provided more than 4.9 million small businesses with more than $ 521 billion in potentially recoverable loans, directly ensuring that 50 million American workers will keep their jobs, according to a new report. of the SBA on PPP loan approvals. The average loan amount was $ 106,772, and 5.460 lenders have participated in the program so far. Congress passed a law signed by President Trump that extends the filing deadline until August 8, 2020.
Institutional lenders” approval percentages increased to 21.6% in June, against 21.4% in May.
“Institutional lenders, like other categories of lenders, saw their approval percentages steadily increase in May and June, after disastrous results reported in March and April,” Arora said. “As the economy slowly emerges from the coronavirus lockdown, I believe institutional lenders will again play a vital role in lending to small businesses. “
Loan approval rate between alternative lenders jumped to 23.4% in June, a substantial increase over May’s figure of 20.5%.
“Some businesses – especially those that are strapped for cash – borrow from alternative lenders because they can be approved for the cash quickly,†Arora said.
Credit unions approved 21.35% loan applications in June, a slight increase of 21.2% in May 2020.
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.
About Biz2Credit
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.
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