Small Business Loan Approvals Dropped at Big Banks, Rose at Small Banks and Alternative Lenders in October 2023: Biz2Credit Small Business Lending Index™
Loan approval rates at institutional investors and alternative lenders increase for 10th consecutive month, while credit union approval rate returns to all-time Index low
NEW YORK, Nov. 08, 2023 (GLOBE NEWSWIRE) — Small business loan approval percentages at big banks ($10 billion+ in assets) decreased again from 13.1% in September to 13% in October, according to the latest Biz2Credit Small Business Lending Index™ released today.
“Small business lending has been on a downward slope in 2023. As expected, acquiring a small business loan from a big bank has become increasingly more difficult with every passing month,” said Rohit Arora, CEO of Biz2Credit and one of the nation’s leading experts in small business finance. “Small business owners are having better success with smaller banks and/or alternative lenders.”
After a slow start in 2023, small banks approval percentages rose from 19.3% in September to 19.5% in October, marking an increase every month since June 2023.
“Small banks have proven to be quite dependable for borrowers in today’s economic climate,” said Arora. “They’re more focused on SBA lending than the larger banks are, and they are closing more loans.”
The approval rates of Institutional investors also rose from 27.5% in September to 27.6% in October, while alternative lenders increased from 29.7% in September to 29.9% in October.
“With the two highest loan approval percentages among the five categories of lenders monitored in the Biz2Credit Small Business Lending Index, institutional investors and alternative lenders have steadily increased in approval rates for well over two years now,” Arora added. “These non-bank lenders have become reliable financing options for small businesses. I do not see that changing anytime soon.”
Approval rates at credit unions returned to their all-time low number of 19.8% in October, dropping from 19.9% in September.
Total nonfarm payroll employment increased by 150,000 in October and the unemployment rate changed little at 3.9%, according to the Jobs Report released by the U.S. Bureau of Labor Statistics on Friday, Nov. 3. Job gains occurred in health care, government, and social assistance. Employment declined in manufacturing due to strike activity. Many of these jobs are created by small businesses.
To determine its Small Business Lending Index, Biz2Credit analyzed loan requests from companies in operation for more than two years with credit scores above 680. The results are based on primary data submitted by more than 1,000 small business owners who applied for funding on Biz2Credit’s platform. To view the October 2023 Index, click here.
About Biz2Credit
Founded in 2007, Biz2Credit has arranged more than $7 billion in small business financing. The company is expanding its industry leading Biz2X technology in custom 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, (908) 720-6057, [email protected]
