WASHINGTON–According to newest numbers released as part of the Biz2Credit Small Business Lending Index for May, loan approval rates have increased for banks and non-bank lenders.
For credit unions specifically, Biz2Credit reported CUs saw the same increase as big banks with approval rates rising ever-so-slightly to 20.4% in May from 20.3% in April.
Ditto for institutional lenders with the same slight increase approving 23.6% of loans in May, from 23.5% in April.
“Although the higher approval rates are not huge, it is heading in the right direction for owners looking for funding,” Biz2Credit said in releasing its latest analysis.
At big banks, ($10 billion+ in assets) the jump was just 10 basis points from April (13.4%) to May (13.5%). The increase in small banks was slightly higher going from 18.2% in April, to 18.7% in May.
Larger Increase
Faring best in the Biz2Credit analysis were alternative lenders, which approved 24.3% of funding applications in May 2021, compared to 24.0% in April.
Biz2Credit CEO Rohit Arora, says these lenders are handling a larger number of loan requests, and he attributed the increase to the shift towards online.
“With the conclusion of PPP, banks are focusing on forgiveness and may not be ready to ramp up small business lending that is not government-backed,” Arora said.
Small Business Loans to See a Jump
According to Arora, there is pent-up demand from consumers. Add to this the post-pandemic economy and small businesses are set to experience noticeable growth. And to manage this growth many owners will be looking for loans. This, Arora said in a statement, is going to make next month’s lending figures significant, especially from online or digital providers.