Loan approval rates continue to slowly rise, according to the Biz2Credit Lending Report for July. As they did during June, Small Banks and Alternative Lenders saw the strongest growth with each showing a .2% increase.
Institutional lenders and Big Banks each saw a .1% increase in loan approval rates. Of all lenders, loan rates only decreased with Credit Unions, and that was just a 1% decrease.
Biz2Credit Small Business Lending Index August 2022
Biz2Credit CEO Rohit Arora said that the increases were “positive signs” but pointed out that for small business, funding often comes at variable rates. The variable rates mean that the cost of capital for small businesses is increasing, as they continue to struggle to find workers.
“Rising labor costs, combined with 8.6% inflation in May, continue to put a crunch on small companies,” Arora said.
Biz2Credit is an online lending platform and reports monthly on loan approval rates. The report is based on loan applications from 1,000 small business owners.
The report includes loan approval rates through July 2022.
Key Data from the June Biz2Credit Small Business Lending Index
Big Banks (those with more than $10 billion in assets) reached a 15.5% approval rating, an increase from 15.4% in June. Big Banks have seen a steady .1% approval rating increase since March.
Two years ago, the loan approval rates for Big Banks were 28.3%.
The approval rating for Small Banks grew to 21.1% in July, up from 20.0 in June.
Two years ago, the loan approval rate from Small Banks was 50%.
Institutional Lenders saw an approval rate rise a tenth of a point, to 25.6% in July. Institutional Lenders have seen a steady .1% approval rate since January.
Two years ago, the loan rate for Institutional Lenders was 66.5%.
Alternative Lenders approval rates rose to 27.1% in July, an increase from 26.9 in June.
Two years ago, the loan approval rate for Alternative Lenders was 55.9%.
Credit Union rates had remained steady at 20.6% for several months dropped to 20.5% in July.
Two years ago, the loan approval rate from Credit Unions was 39.6%.
How Biz2Credit Compiles the Report
Biz2Credit analyzes loan requests from businesses which have been in business for more than 2 years, which also have a 680 points or higher credit rating. Biz2Credit compiles data from more than 1,000 businesses to prepare the report.
Get the latest headlines from Small Business Trends. Follow us on Google News.
Source : SmallBizTrends