In 2017, small business confidence hit post recession record highs, with small firms seeing America in a new light under the Trump administration. With continued low unemployment numbers, and a new tax reform bill passed in December, business loan approval rates also saw a steady increase from big and small banks alike. According to Forbes, “Business loan approval rates for big banks (25.2 percent) and institutional lenders (64.3 percent) hit new post-recession highs in December, according to the latest Biz2Credit Small Business Lending Index.” With interest rates trending upwards, there is a believe that banks will have the opportunity to make more money from lending to growing businesses.
In addition to an uptick in big bank approval rates, “small banks approved 49 percent of the funding requests pretty much all year long.” This is consistent with the past several years, showing the steadiness of banking loans and, with new tax measures in place, could see a rise. Additionally, “banks and institutional lenders are reaping the benefits of investing money into incorporating financial technology (FinTech) into their operations.” This is another source of loan revenue which is seeing an increase.
The only group of lenders that did see a decrease were alternative lenders where “approvals for the category declined every month in 2017, except for November, according to the Biz2Credit Index. With traditional lenders becoming increasingly willing to fund small businesses, alternative lenders are getting requests from lower quality borrowers.”
2018 is set up to be a great year for growing businesses looking to win loan approvals. If you’re interested in starting or growing your business, and you have either a good credit score or business revenue in excess of $100,000, now is a great time to apply for a loan.