NEW YORK–Small business loan approval rates have rebounded in May to 11.5% up from 8.9% in April according to a Biz2Credit report.
The company’s analysis suggests the numbers are indicative of an uptick of approval rates among big banks ($10 billion-plus in assets) for small businesses as fears over coronavirus have been declining, although the number of cases in many markets has not.
According to the Biz2Credit Lending Index for May, the loan approval rate among small banks also improved with the figure climbing to 16.9% in May from April’s “dismal” 11.8%.
“Similarly, institutional lenders and credit unions too saw a bounce back. Approval percentages for institutional lenders’ reached 21.4% from 18.1% in April, while credit unions saw their figures reaching 21.2% from 18.1% during the same period,” the company said. “However, the figure is still far below the record high February figures pre-coronavirus pandemic, which was a healthy 50.3%. February’s record loan approval percentage for small businesses at big banks had followed January’s 28.3% record high.”
May’s figures also show a 30-plus percentile decline from the same period last year which was around 49.9%.
Biz2Credit CEO noted the rates do not reflect Payroll Protection Program (PPP) loan approval rates, which are under the purview of the government rather than financial institutions.