Small Business Loan Approvals Stalled at Big Banks, Rose at Small Banks and Alternative Lenders in November 2023
Biz2Credit Small Business Lending Index™ finds approval rates for alternative (non-bank) lenders reaches highest mark since March 2020.
NEW YORK, Dec. 12, 2023 (GLOBE NEWSWIRE) — Small business loan approval percentages at big banks ($10 billion+ in assets) stalled for the first time since June of this year, staying at 13% in November 2023, according to the latest Biz2Credit Small Business Lending Index™ released today.
“While it is good to see something other than a decrease in loan approval rates from big banks, there is still much work left to be done in order to get back to pre-pandemic numbers,” said Rohit Arora, CEO of Biz2Credit and one of the nation’s leading experts in small business finance.
Small banks approval percentages continue to rise towards the end of 2023, going from 19.5% in October to 19.7% in November, marking an increase every month since June 2023.
“As we close out this year, it remains a positive that small banks have started to become more of an option for business owners searching for capital,” said Arora. “The hope is that this trend will carry over into Q1 of 2024 and beyond.”
The approval rates of Institutional investors rose again from 27.6% in October to 27.7% in November, while alternative lenders also increased from 29.9% in October to 30% in November.
“The last time loan approvals rates from alternative lenders reached 30% was in March 2020, the month before all approval percentages were cut in half due to the COVID pandemic,” Arora added. “This should be a good sign for small business owners.”
Approval rates at credit unions reached a new all-time low number of 19.7% in November, dropping from 19.8% in October.
Total nonfarm payroll employment increased by 199,000 in November, and the unemployment rate edged down to 3.7%, according to the Jobs Report release by the U.S. Bureau of Labor Statistics on Friday, Dec. 8. Job gains occurred in health care and government. Employment also increased in manufacturing, reflecting the return of workers from a strike. Employment in retail trade declined. 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 November 2023 Index, click here.
About Biz2Credit
Founded in 2007, Biz2Credit has arranged more than $8 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]
