NEW YORK, Aug. 09, 2022 (GLOBE NEWSWIRE) -- Small business loan approval percentages at small banks rose from 21.1% in June to 21.2% in July, while approvals at big banks ($10m + in assets) dipped from 15.4% in June to 15.3% in July, according to the latest Biz2Credit Small Business Lending Index™ released today.
Among non-bank lenders, approval percentages improved slightly, while credit union lending approvals dipped:
- Institutional lenders approved 25.8% of loan requests in July, up from 25.6% in June. Approvals in this lending category have climbed consistently in 2022.
- Alternative lenders’ approval rates rose from 27.1% in June to 27.2% in July.
- Credit unions dropped from 20.5% in June to 20.4% in July.
“Approvals at big banks slipped just a bit after months of steady increases. This is likely due to concerns about a possible recession after the Federal Reserve rose interest rates by 75 basis points in an effort to control inflation,” said Biz2Credit CEO Rohit Arora, one of the nation’s leading experts in small business lending and fintech. “Small banks, which process a lot of SBA loans, remain a good source of capital. For companies that need money more quickly, nonbank lenders remain a good option.”
“Small business lending at credit unions continues to flounder,” added Arora. “Fortunately, their approval percentages are roughly half of what they were just before the pandemic and have shown little growth this year.”
Total nonfarm payroll employment rose by 528,000 in July, and the unemployment rate edged down to 3.5%, according to the Jobs Report released by the U.S. Bureau of Labor Statistics released on Friday, August 5, 2022. Job growth was widespread, led by gains in leisure and hospitality, professional and business services, and health care. Both total nonfarm employment and the unemployment rate have returned to their February 2020 pre-pandemic levels. Many of these jobs are created by small businesses.
“Small business owners continue to face challenges in finding workers. The demand for labor is driving up wages, which impacts the bottom line for many small companies. Labor costs are usually a company’s largest expense,” Arora says. “Meanwhile, inflation remains high and puts a financial crunch on small business owners.”
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 July 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, john@overthemoonpr.com
