Small banks and non-bank lenders show growth, according to Biz2Credit Lending Report

Loan approval rates have declined slightly at major banks and credit unions, but loan approval rates continue to rise slowly at small banks and non-bank lenders, according to the August Biz2Credit Lending Report.

Biz2Credit Small Business Lending Index September 2022

“Terms and conditions are tightening and major banks are now taking more provisions,” said Rohit Arora, CEO and co-founder of Biz2Credit, and one of the nation’s leading experts on small business lending and fintech. “As smaller banks are more active in SBA lending, their approval rates are still high as demand for government-guaranteed products is high.”

Biz2Credit is an online lending platform that reports monthly loan approval rates. The report is based on loan applications from 1,000 small business owners. The report includes loan approval rates through August 2022.

Key Data from the August Biz2Credit Small Business Lending Index

big banks

Loan approval rates at major banks (those with more than $10 billion in assets) fell to 15.1%, down from the approval rating of 15.5% in July. It is the first decline since February 2022. Since March, the major banks have seen a steady rise in the approval rating of 0.1% per month. Two years ago, loan approval rates for major banks were 28.3%.

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small banks

The approval rating for small banks rose to 21.4% in August, up from 21.1% in July and 20.0 in June. Two years ago, the loan approval rate from Small Banks was 50%.

Institutional Lenders

Institutional lenders saw an approval rate of 25.9% in August, up from 25.6 in July. Institutional lenders had a stable approval rate of 0.1% since January, before the 0.3% increase in August. Two years ago, the borrowing rate for Institutional Lenders was 66.5%.

Alternative Lenders

Alternative Lenders approval rates rose to 27.3% in August, up from 27.1% in July. Two years ago, the approval rate for alternative lenders was 55.9%.

Credit Unions

Credit Union loan approval rates fell to 20.3% in August. Credit Union rates had been stable at 20.6% for several months before falling to 20.5% in July. Two years ago, the credit union loan approval rate was 39.6%.

How Biz2Credit compiles the report

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Biz2Credit analyzes credit applications from companies that have been in business for more than 2 years and that also have a credit rating of 680 points or higher. Biz2Credit collects data from more than 1,000 companies to prepare the report.

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