Small-Business Loan Approvals at Big Banks Hit Post-Crunch High

Small-Business Loan Approvals at Big Banks Hit Post-Crunch HighIn the five years since the height of the Great Credit Crunch, small businesses have had a tough time getting loans from the largest lenders. Small businesses are finding it better to use other lenders like ONYX Finance Melbourne as an alternative to larger lenders. They are finding that they are able to receive better support when it comes to things like getting a loan and making sure they have the right amount of finance for their business. However, if you do have a small business, then it’s important to note that you cannot get a loan straight away if you do not have any credit or assets that you can use to secure the loan. The best thing that you can do is try to improve your credit score so that you have a higher chance of your loan being accepted and getting a better interest rate.
But credit standards seem to be loosening somewhat, according to the Small Business Lending Index, a monthly analysis of 1,000 loan applications on Biz2Credit.com.
Small business loan approvals at big banks — institutions with $10 billion or more in assets — jumped to an all-time index high of 17.4 percent in July 2013, from 16.9 percent in June.
In a year-to-year comparison, big bank approval rates have increased by more than 50 percent.
Meanwhile, approvals at credit unions improved for the first time in more than a year, ending a 13-month slide which saw approval rates plummet more than 20 percent.
Small banks and alternative lenders saw slight dips in approval percentages in July 2013.
“The 2012 tax returns have provided the big banks with financial information that indicates many small businesses are doing better now than they were during the past few years,” said Biz2Credit CEO, Rohit Arora who oversaw the research.
Banks are more willing to allocate capital for small business loans, resulting in the uptick in approval rates, Arora said.
July’s numbers represent the best post-recession lending figures, he said.
Small business loan approvals made by credit unions improved to 45.1 percent in July, up from 44.8 percent in June 2013.
This ended a 13-month slide in which lending approvals plummeted more than 20 percent.
Larger credit unions are increasing investing in Small Business Administration loans.
Possessing the license to carry out SBA loans is a huge advantage that the credit unions have over alternative lenders, and they are starting to promote this aggressively, Arora said.
Loan approvals at small banks dropped slightly to 49.4 percent in July from 49.8 percent in June. In a year-to-year comparison, lending approvals at small banks is still slightly higher than it was at the same point last year.
Small business loan approvals by alternative lenders dropped to 63.2 percent in July from 63.4 percent the previous month. Approval rates are slightly lower than they were at the same point last year, and indications are that alternative lending may have peaked.
“Even people with lower credit scores are beginning to get funding from mainstream lenders, who offer lower interest rates than alternative lenders,” Arora said.
Small-Business Loan Approvals at Big Banks Hit Post-Crunch High

One thought on “Small-Business Loan Approvals at Big Banks Hit Post-Crunch High

  • August 12, 2013 at 9:58 pm
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    Seriously! Why are you doing this to these nice people? Small business loan approvals with big banks are NON-existent. Not even for folks with good credit. And this writer is saying alternative lending has peaked? Not even close to being true. If you are a business owner with bad credit, and you feel like wasting your time or ruining your day, then head on to your local bank and go hear it with your own ears – DENIED! Alternative lending is still the only source for the small business loans up to 500k, at least for now. Big banks might be trying to get in but they are very behind on technology, have rigid guidelines and they take way too long to get a decision out to the applicant.

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