Latest Small Business Lending Shows Increasing Loan Acceptance Rates Amongst Banks

By Gerri 5 years ago

Latest Small Business Lending Shows Increasing Loan Acceptance Rates Amongst Banks

The acceptance rates for small business loan requests in giant banking institutions ($10b plus in assets) went up 1/10 of a percent to hit 28%.

These are according to the findings of a Small Business Lending Index by Biz2Credit, a micro-business lending platform. Biz2Credit also reported that this was the best performance since we started recovering from web design caloundra the recession— as of Oct 2019.

Reduced Interests Rates

The Fed Reserve’s most recent reduced interests have also made borrowing more affordable for micro-business who are enjoying a recovering economy. So far, borrowing has been fun for small companies seeking commercial funding.

More Jobs, Less Unemployment 

Employment in the private sector (excluding farm-related hires) went up by over 120,000 in Oct, while unemployment went down 3.5%.

In early November, an Employment Status Press Release by the Bureau of Labor Statistics reported noteworthy employments in food &beverage, financing, and social aid industries.

Most of the new employments have been enabled by micro-businesses borrowing finances to fund their expansion.

More SBA Loan Approvals

In 2019’s financial year, Small Business Administration loan volumes went beyond $28 billion. The SBA accepted more than 60,000 loans. Acceptance rates in SBA-approved small banks also jumped up 1/10 of a percent from Sept to Oct.

SBA loans are built to help lending institutions control the risks related to loans, which is why they are quick to accept businesses that would otherwise fail to qualify for financing.

The Index also found that the acceptance rates for both bank loans and SBA went up. Half (or 50 percent) of all loan applications were accepted.

Approval Rates for Institutional Lenders Increase

For Institutional lenders—who provide businesses with favorable rates and terms—acceptance increased to hit the 66 percent mark, an uptick from Sept’s 65.9 percent.

This category of lenders also approved 75 percent of all the loan applications they receive.

Alternative lenders                   

Micro-business loan acceptance amongst alternative lending companies, plummeted by 0.01 percent from Sept’s findings. Alternative lenders make finances available for businesses with poor credit scores through MCAs and many other types of financing.

Credit Unions

Acceptance rates amongst Credit unions’ jumped slightly to 39.8 percent in Oct from Sept’s 39.7 percent.

This was the lowest performance amongst Credit Unions in the Index’s history of scrutinizing business loan acceptance rates since Jan 2011.

Final Words

Small businesses are major drivers of the economy. More acceptance rates are a sign we are powering our economy to expand further.

Hopefully, borrowing terms and conditions will get better and better from micro-businesses and startups.

Author Bio: Michael Hollis is a Detroit native who now lives in Los Angeles. He is an account executive who has helped hundreds of business owners get a merchant cash advance. He’s experimented with various occupations: computer programming, dog-training, scientificating… But his favorite job is the one he’s now doing full time — providing business funding for hard working business owners across the country.