NEW YORK, May 11, 2021 (GLOBE NEWSWIRE) -- Small business loan approval percentages at big banks ($10 billion+ in assets) dipped slightly to 13.4% in April from 13.5% in March 2021, according to the latest Biz2Credit Small Business Lending Index™ released today. Similarly, small banks’ approvals dropped to 18.2% in April, down one-tenth of a percent from 18.3% the previous month.
“Traditional small business loans are hard to obtain at the moment, much more so than they were before the pandemic,” said Biz2Credit CEO Rohit Arora, one of the nation’s leading experts in small business finance. “Banks have been flooded with applications for Paycheck Protection Program (PPP) loans since the program entered its second round.”
Nonfarm payroll employment rose by 266,000 in April, while the unemployment rate was little changed at 6.1%, the U.S. Bureau of Labor Statistics reported on Friday, May 7. Notable job gains occurred in leisure and hospitality and other services. Many of these jobs are created by small businesses.
Credit unions dipped to a 20.3% approval rate in April, down a notch from 20.4% in March 2021. However, other non-bank lenders inched up slightly. Institutional lenders approved 23.5% of funding requests in April, up from 23.3% in March, while alternative lenders approved 24.0% of applications in April, compared to 23.9% a month prior.
“Institutional lenders and alternative lenders saw slight increases in approval rates, but we are still far from where we were before the coronavirus hit,” Arora said. “Hopefully, as the infection rates decline and the economy shows signs of recovery, small business loan approvals should begin a steadier upward trend for all categories of lenders.”
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.
About Biz2Credit
Founded in 2007, Biz2Credit has arranged more than $3 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.
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