Small business loan approval percentages at large banks (over $10 million in assets) increased from 14.9% in March to 15.1% in April, and small bank approvals ( less than $10 billion in assets) also increased from 20.6% in March to 20.8% in April, according to Biz2Credit Small Business Loan Index.
Among several categories of non-bank lenders, approval percentages also climbed. Institutional lenders approved 25.4% of funding requests in April, up a tenth of a percent from 25.3% in March. Alternative lender approval rates fell from 26.6% in March to 26.8% in March. However, credit unions stagnated at 20.6% in April after falling a tenth of a percent in March.
“Small business loan approval rates continue to improve, but we are still far from pre-pandemic highs,” said Rohit Arora, CEO of Biz2Credit. “With the Federal Reserve raising interest rates last week, the cost of capital for small business borrowers will increase. This will impact future borrowing decisions. variable rates and, for the foreseeable future, these rates are likely to increase.
To compile the index, Biz2Credit analyzed loan applications from businesses that had been in business for 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 have applied for financing on the Biz2Credit platform.