Small-Business Loan Approval Rates Up 30% at Big Banks

Small-Business Loan Approval Rates Up 30% at Big BanksSmall business loan approvals at big banks — those with at least $10 billion in assets — jumped to 17.4 percent in November 2013 from 14.3 percent in October, according to Biz2Credit‘s monthly analysis of 1,000 loan applications.
Year-over-year, lending approval rates at big banks have increased more than 30 percent.
Moreover, small business loan approvals at small banks increased from 44.3 percent in October to 49.7 percent in November.
Approval rates at all banks have returned to “pre-government shutdown levels” in September as the Internal Revenue Service and the Small Business Administration are catching up on the backlog of loan applications, says Biz2Credit.
Meanwhile, credit unions, which had been on a lending rebound before the government shutdown, saw a slight increase in approval rates in November. Approval rates at credit unions improved to 44.5 percent, from 43.4 percent in October, but they are still down nearly 10 percent in a year-to-year comparison.
Alternative lenders continue to thrive in small business lending. Approval rates by these non-mainstream lenders dropped slightly to 67.2 percent in November 2013, down from 67.3 percent the previous month.
Despite the gains, banks of all sizes need to improve online services for small businesses, including offering a more efficient loan application process. If you are a small business in need of a loan, then luckily for you there are a few things that you can do. For example, you might want to consider something like invoice factoring (or invoice financing) if you can.
The mortgage refinancing boom at big banks has waned, said Biz2Credit CEO, Rohit Arora, who oversaw the research, so these institutions need to look elsewhere to make up for lost revenue.
“Big banks must begin to focus on improvements in other areas such as technology,” Arora said. “It’s still puzzling why many banks and credit unions still do not offer online small business applications to streamline the process. This would benefit both the financial institutions and the loan applicants.”
Small-Business Loan Approval Rates Up 30% at Big Banks

Leave a Reply

Your email address will not be published. Required fields are marked *