The American economy is strong and according to the latest Biz2Credit Small Business Lending Index, “a monthly analysis of loan approval rates, big banks approved 24.5 percent of funding requests, a new post-recession high in July.” In addition to big bank approval rates, smaller local banks are also approving loans at higher rates, granting almost half (48.9% to be exact) of all small business loan requests.
Institutional lenders are also following suit approving over 60% of small business loan requests. While there are many factors that come into play, the big assumption is due to the strong dollar and a sense of opportunity in the small business lending space.
The only lending sector to see a drop was approvals from alternative lenders falling “three-tenths of a percent to 57.2 percent.” This is big news as companies like Paypal are looking to ramp up their alternate lending sector. Still, the rates are in excess of 50% and still a mainstay for small business owners needing more risky credit lending options. Credit Unions remained the same at just over 40% approval rates.
For the report, Biz2Credit analyzed loan requests ranging from $25,000 to $3 million from companies in business more than two years with an average credit score above 680.