Approval rates for small business loans at big banks, ($10 billion-plus in assets) and institutional lenders rose to post-recession highs in December 2016, according to the newest update from Biz2Credit.
Meanwhile, approval rates at alternative lenders and credit unions continued to decline, a trend that covers the past two years.
These results come from Biz2Credit’s Small Business Lending Index, a monthly analysis of more than 1,000 small business loan applications on the site. Small banks also saw an increase in the approval rates for December.
Small business loan approval rates at big banks jumped to 23.9 percent in December, up two-tenths of a percent from November. It marked the fifth consecutive month of increases for this category of lenders. Loan approval rates at big banks in 2016 increased by one full percentage point year-over-year.
“The combination of an improving economy and the expected deregulation of the financial sector when Donald Trump takes office has provided banks with optimism. This has resulted in higher loan approval rates in recent months,” said Biz2Credit CEO Rohit Arora. “After a slow start to the year, banks aggressively worked on closing deals to bump up their end-of-the-year targets.”
At small banks approval percentages climbed to 48.9 percent last month, up one-tenth of a percent from November. Loan approval rates throughout the year had been relatively stagnant, but there are some encouraging signs for 2017.
Institutional lenders extended their surge in loan approval rates for the sixth consecutive month, improving to 63.4 percent in December 2016.
Loan approval rates at credit unions dropped to a new Index low of 40.9 percent in December.
Biz2Credit analyzed loan requests ranging from $25,000 to $3 million from companies in business more than two years with an average credit score above 680.