NEW YORK–A new analysis has found loan approval rates by credit unions has declined in recent months.
The analysis, released as part of the latest Biz2Credit Small Business Lending Index, found a year ago, credit unions approved almost 40% of the applications received. In February 2021, the figure was at 20.3%, a slight fall from January 2021 when credit union approval rates stood at 20.5%, Biz2Credit reported.
But the decline hasn’t just taken place at credit unions. Loan approval rates made to small businesses by banks and other lenders have fallen significantly since their peak a year ago, according to the company. The results of the Index are based on primary data submitted by more than 1,000 small business owners who applied for funding on the Biz2Credit platform.
The approval rates in the Biz2Credit analysis refer to non-Paycheck Protection Program (PPP) loans. Biz2Credit is also a processor of PPP loan apps.
‘Dramatic’ Contrast
According to Biz2Credit, in February 2021, small business loan approval percentages increased slightly to 13.3% from 13.2% in January 2021.
“This contrasts dramatically to the same time last year, when loan approval rates to small businesses from big banks stood at 28.3%,” the company said. “The figures show the challenges that small businesses requiring funding are currently facing. It highlights the importance for small business owners to acquaint themselves with the funding that is available to them. Being equipped with the right support, resources and funding are in a better position to navigate these testing times and overcome hurdles created by the pandemic.”