Biz2Credit Small Business Lending Index ™ for December finds loan approval rates continue to rise, but at a slow pace

Approval percentages at large banks, small banks, institutional lenders, alternative lenders and credit unions are still about half of what they were in December 2019

NEW YORK, January 11, 2022 (GLOBE NEWSWIRE) – Small business loan approval percentages in big banks ($ 10 + in assets) fell from 14.2% in November to 14.3% in December, and small banks” approvals also fell from 19.9% ​​in November to 20.1% in December, according to the last Biz2Credit Index of Small Business Loans released today.

Among several categories of non-bank lenders, approval percentages have also increased. Iinstitutional lenders approved 24.9% funding requests in December, up a tenth of a percent from 24.8% in November. Alternative lenders approval rates rose from 25.8% in November to 26.1% in December. Credit unions approved 20.6% in December, the same percentage as the two previous months.

Two years ago, bank approval percentages were about double what they are today. Large banks approved 28.2% of loan applications, while small banks approved 50.6% of loan applications in December 2019. The percentages of non-bank lenders in 2019 were even higher: institutional lenders have approved nearly two-thirds (66.2%) of applications, alternative lenders were granted. 56.3% and credit unions approved 39.7%.

“Banks and most non-bank lenders saw their loan approval percentages increase in December, with the exception of credit unions, which stagnated,” said Rohit Arora, CEO of Biz2Credit, one of the leading national experts in fintech and small business loans. . “The approval percentages are increasing more slowly than expected. Loan approval rates remain well below the pre-COVID approval levels of December 2019, just two years ago. “

The total number of non-farm jobs increased by 199,000 in December and the unemployment rate fell to 3.9%, according to the employment report released by the United States Bureau of Labor Statistics on Friday, January 7. 2022. Employment continued to grow in leisure and hospitality. , in professional and commercial services, in manufacturing, in construction and in transportation and warehousing, according to the report. Many of these jobs are created by small businesses.

“After the PPP, banking activity in the area of ​​small business loans has been slow. However, in 2022, with the end of government lending programs and the expected rise in interest rates, it will become more lucrative for banks to lend again. Activity is expected to resume this year, ”said Arora.

“Markets don’t like uncertainty, and with the pandemic taking unpredictable turns, uncertainty persists at this time,” he continued. “Normalcy has not yet returned because the virus did not allow it. We thought that with the vaccination, COVID would reduce the problem, but that did not happen. We didn’t expect the small business economy to stagnate for this long, and we certainly didn’t predict the inflation we’re seeing.

Arora said certain types of businesses are doing well: IT, financial services, and anything that doesn’t require a lot of human interfacing. Meanwhile, he said restaurants, hotels, entertainment venues and the cruise industry are still struggling and likely will until the coronavirus is under control.

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. To consult the December 2021 report, Click here.

About Biz2Credit

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, Over The Moon PR, (908) 720-6057, [email protected]