Biz2Credit Small Business Loan Index June 2022 Loan approval rates continue to slowly increase, with large and small banks seeing the strongest growth in May. “The continued incremental increase in loan approval percentage is encouraging,” said Biz2Credit CEO Rohit Arora.
Aurora noted that the majority of small business loan financing is variable rate. As interest rates rise, this could lead to an increase in the cost of borrowing capital for small businesses, he added.
Biz2Credit is an online lending platform and publishes monthly loan approval rate reports. The report is based on loan applications from 1,000 small business owners.
The report includes loan approval rates through May 2022.
May Biz2Credit Small Business Lending Index Key Data
Here is some information from the latest Biz2Credit Small Business Loan Index:
Large banks (those with more than $10 billion in assets) achieved an approval rating of 15.3%. This follows a steady increase: 15.1% in April, 14.9% approval in March, compared to 14.7 in February and 14.5% in January.
Two years ago, loan approval rates for major banks were 28.3%.
The approval rating for small banks rose to 20.9% in May from 20.8% in April. Rates were 20.6% in February.
Two years ago, the loan approval rate for small banks was 50%.
Institutional lenders saw their approval ratings rise by a tenth of a point to 25.5% in May. Previous rates were 25.1% in January, 25.2% in February, 25.3% in March and 25.4% in April.
Two years ago, the lending rate for institutional lenders was 66.5%.
Alternative lender approval rates fell from 26.8% in April to 26.9% in May. Rates were 26.6% in March.
Two years ago, the loan approval rate for alternative lenders was 55.9%.
Two years ago, the credit union loan approval rate was 39.6%.
How Biz2Credit compiles the report
Biz2Credit analyzes loan applications from companies that have been in business for more than 2 years, which also have a credit score of 680 points or higher. Biz2Credit compiles data from over 1,000 companies to prepare the report.
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