Small business loan approval percentages at large banks (or those with more than $ 10 billion in assets) edged down to 13.4% in April from 13.5% in March 2021, according to the latest. Biz2Credit Index of Small Business Loans. Likewise, approvals at smaller banks fell to 18.2% in April, from 18.3% in March.
“Traditional small business loans are hard to come by right now, much more so than they were before the pandemic,†said Rohit Arora, CEO of Biz2Credit. “Banks have been inundated with paycheck protection program (PPP) loan applications since the program entered its second round. “
Non-farm payroll employment increased by 266,000 in April, while the unemployment rate was little changed at 6.1%, according to the United States Bureau of Labor Statistics, which noted that job gains were are produced in leisure and hospitality and other services.
Credit unions fell to a 20.3% loan approval rate in April, down a notch from 20.4% in March. However, other non-bank lenders increased slightly. Institutional lenders approved 23.5% of funding requests in April, up from 23.3% in March, while alternative lenders approved 24% of requests in April, up from 23.9% in March.
“Institutional lenders and alternative lenders have seen their approval rates increase slightly, but we are still a long way from where we were before the coronavirus hit,†Arora said. “Hopefully, as infection rates decline and the economy shows signs of recovery, small business loan approvals should begin to trend more steadily for all lender categories. “
Biz2Credit analyzed loan applications from businesses that have been in business for more than two years with credit scores over 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.
