December approval rates rose slightly at Small Banks, Institutional Investors, and Alternative Lenders while Big Banks and Credit Unions stalled last month.
NEW YORK, NY, January 10, 2023 – Small business loan approval percentages at big banks slipped again, falling from 14.6% in November to 14.5% in December, which tied with January for the lowest monthly approval rate for big banks in 2022, according to the latest Biz2Credit Small Business Lending Index™ released today.
Meanwhile, approval percentages of business loan applications at small banks rose slightly from 21.1% in November to 21.2% in December. Similarly, credit unions saw a decrease in approvals, dropping from 20.3% in November to 20.2% in December.
Among other non-bank lenders, approval percentages of alternative lenders increased from 27.4% in November to 27.6% in December. Institutional Investors approved 25.9% in December, up from 25.8% in November.
“It is currently a tough time to get small business loans from big banks,” said Rohit Arora, CEO of Biz2Credit, one of the nation’s leading experts in small business finance and fintech. “Many small business owners are waiting to see if interest rate increases will end in early 2023. Meanwhile, the ones that have applied for loans were not very successful in securing them.”
“As we look at 2022, big bank small business loan approval percentages rose, then steadily declined where the figure in December was the same as it was last January. Meanwhile, small bank approval rates inched up ever so slightly, but they are still far below pre-pandemic levels,” Arora added. “Institutional Investors and Alternative Lenders were slightly up in 2022. Credit unions in December recorded their second lowest total ever since Biz2Credit began reported loan approval percentages in 2011. Overall, it was a tough year for small businesses looking to secure financing.”
Total nonfarm payroll employment increased by 223,000 in December, and the unemployment rate
edged down to 3.5%, according to the Jobs Report released by the U.S. Bureau of Labor Statistics on Friday, Jan. 6. Notable job gains occurred in leisure and hospitality, health care, construction, and social assistance. Many of these jobs are created by small businesses.
Biz2Credit analyzed loan requests from companies in business more than two years with credit scores above 680. The results are based on primary data submitted by more than 1,000 small business owners who applied for funding on Biz2Credit's platform. To view the report for December 2022, click here.
Founded in 2007, Biz2Credit has arranged more than $7 billion in small business financing. The company is expanding its industry-leading technology in custom digital platform solutions for banks and other financial institutions, investors, and service providers. Visit www.biz2credit.com or Twitter @Biz2Credit, Facebook, and LinkedIn.