Biz2Credit Small Business Lending Index™ Reports Loan Approval Percentages Dropped at Banks and Credit Unions in November
Approval rates rose slightly at Institutional and Alternative Lenders last month
NEW YORK, Dec. 13, 2022 (GLOBE NEWSWIRE) — Small business loan approval percentages at big banks dropped from 14.7% in October to 14.6% in November, the second lowest total in 2022, according to the latest Biz2Credit Small Business Lending Index™ released today. Approval percentages of business loan applications at small banks declined from 21.2% in October to 21.1% in November.
Similarly, credit unions granted 20.3% of loan requests in November, a decrease from October’s figure of 20.4%.
Among other non-bank lenders, approval percentages of alternative lenders rose from 27.3% in October to 27.4% in November. Institutional Investors also showed an increase in approval percentages, going from 25.7% in October to 25.8% in November.
“With seemingly ever rising interest rates, small businesses are taking a wait-and-see approach to borrowing. All eyes will be on what the Federal Reserve announces at its next meeting on Dec. 14. Most experts anticipate another 25bps increase in interest rates,” said Rohit Arora, CEO of Biz2Credit and one of the nation’s leading experts in small business finance. “While rates continue to rise, the economy has not yet reaped the benefits of tighter monetary policy as a means to curb inflation.”
Total nonfarm payroll employment increased by 263,000 in November, and the unemployment rate was unchanged at 3.7 percent, according to the Jobs Report released by the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in leisure and hospitality, health care, and government. Employment declined in retail trade and in transportation and warehousing. Many of these positions are created by small businesses, which are responsible for the lion’s share of new jobs in the private sector economy.
“Inflation and high cost of capital remain among the top concerns for small business owners,” Arora said. “There is a lot of uncertainty for small businesses in the current economy. While we seem to have recovered well from the worst depths of the COVID pandemic, cost pressures — including rising wages, increasing costs of raw materials, and cost of capital — are putting a lot of pressure on small companies at this time.”
Biz2Credit analyzed loan requests from companies in business 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 report for November 2022, 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 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]
