For the month of July, Biz2Credit Small Business Lending Index revealed that lending approvals for small firms increased year to year. According to Small Business Trends, in comparing 2017 to 2018, the approval rate at big banks for July 17 stood at 24.5%. This “rate has now increased by almost two percentage points to 26.3% in 2018. According to Arora, banks are more bullish with small businesses because they have been creating many of the jobs driving the current economy.”
When looking at month to month, not much has changed for lending organizations outside of big banks. While big bank approval rates for small businesses increased “two tenths of a percent from 26.1% in June to 26.3% in July”, institutional lenders, alternative lenders, and credit unions all remained stagnant. The approval rate for small banks increased one tenth of a percent from 49.6% to 49.7%.
With a strong economy, lenders across all sectors are approving more loans at high rates. The Federal Reserve recently admitted that they will be looking to increase lending rates in September so for small businesses, August may have been the last month for good lending rates. Time will tell how this unfolds but for now, small businesses are reaping the benefit from big banks looking to lend.