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Biz2Credit Small Business Lending Index Reports New High in Big Bank Loan Approvals in February 2013 | |
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March 14, 2013 Monthly Index Reports Increases at Big Banks for Third Consecutive Month, While Small Bank Approved More Than Half of Their Loan Requests in February. Small business loan approval rates at big banks ($10B+ in assets) in February 2013 increased to 15.9%, up from the 15.3% rate in January, according to the Biz2Credit Small Business Lending Index, a monthly analysis of 1,000 loan applications on Biz2Credit.com. The figure also represents a 35% increase over the February 2012 approval figure of 11.7% and is the highest approval percentage by big banks since Biz2Credit's Index was introduced over 2 years ago. Meanwhile, small bank approval rates of small business loan requests increased slightly in February, climbing to 50.3% from 49.9% in January. For the first time in four months, small banks are approving more loans than they are declining. A year-to-year comparison indicates that the small bank approval rate in February 2013 was also up from the February 2012 figure of 47.6%. "Smaller banks are making more and more loans through the SBA's Small Loan Advantage Program, which range in amounts from $50,000 to $350,000 and require little collateral," said Biz2Credit CEO Rohit Arora, who oversaw the research. "Big banks, including Sovereign and Citizens Bank, are also increasing their approvals of loans between $50,000 and $500,000. We have even seen an uptick by giants such as TD Bank and Bank of America. Small business lending is a profitable business. I'm surprised it has taken so long for some players to get back into the game." Credit union approvals of small business loans continue to slide, as their approvals dropped for the ninth consecutive month to 45.9% in February, down from 46.9% in January. Approvals by credit unions have dropped more than 20% in a year's time. "Despite the surge of loan approvals by credit unions from late 2011 and early 2012, they are rejecting more than half of the funding requests from small business owners," Arora explained. "They are lagging behind as traditional banks are becoming more aggressive in the small business lending space. Credit unions also have to make better use of technology. Their entire process is too slow." * Banks with more than $10 billion in assets are classified as "big banks." * Banks with less than $10 billion in assets are classified as "small banks." * Credit Unions are considered a category unto themselves in the Biz2Credit Small Biz Lending Index. * "Alternative lenders" include accounts receivable financers, merchant cash advance lenders, Community Development Financial Institutions (CDFI), micro lenders, and others. Small business loan approvals by alternative lenders - accounts receivable financers, merchant cash advance lenders, Community Development Financial Institutions (CDFI), microlenders, and others -remained at the same 63.7% rate that was recorded in January. About the Biz2Credit Small Business Lending Index 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. Unlike other surveys, the results are based on primary data submitted by more than 1,000 small business owners who applied for funding on Biz2Credit's online lending platform, which connects business borrowers with more than 1,100 lenders nationwide. Founded in 2007, Biz2Credit is a leading credit marketplace connecting small- and medium-sized businesses with lenders, service providers, and complementary business tools. The company matches borrowers to financial institutions based on each business's unique profile -- completed in less than four minutes -- in a safe, efficient, price-transparent environment. Biz2Credit's network consists of 1.6 million users, 1,100+ lenders, credit rating agencies such as D&B and Equifax, and small business service providers including CPAs and lawyers. Having arranged $800 million in funding throughout the U.S., Biz2Credit is widely recognized as the #1 online credit resource for small business loans, lines of credit, equipment loans, working capital and other funding options. Follow us on Twitter @Biz2Credit and 'Like Us' on Facebook at http://www.facebook.com/businessloan. Source: http://www.1888pressrelease.com/biz2credit-small-business-lending-index-reports-new-high-in-pr-460459.html |
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