Small businesses need access to capital right now and they’re having trouble finding it through loans.
While small business loan approval rates at some lenders are up just slightly, according to the latest Biz2Credit Lending Report for September, access to capital remains a challenge.
Biz2Credit CEO and co-founder Rohit Arora said small businesses continue to face the challenges of Covid issues – such as supply chain problems – as well as a tight labor market. Add the rising interest rates and that’s a tough climate for small businesses.
“With ever rising increases in interest rates, now is a tough tie for small businesses in search of capital for growth,” Arora said. He added that small businesses need access to capital to survive.
Small Business Loan Approval Rates in September 2022
Loan approval rates are up at small banks and credit unions. However, the loan approval rates at big banks, alternative lenders, and institutional lenders is down over the last month.
Biz2Credit is an online lending platform and reports monthly on loan approval rates. The monthly Lending Index is based on loan applications from 1,000 small business owners. The report includes loan approval rates through September 2022.
Key Data from the Biz2Credit Small Business Lending Index
Although some rates dipped, they returned to levels from previous months.
Big Banks
Loan approval rates at Big Banks (those with more than $10 billion in assets) declined to 14.9%, the second straight month of a decrease. The decrease in August was the first since February 2022.
Two years ago, the loan approval rates for Big Banks were 28.3%.
Small Banks
The approval rating for Small Banks grew to 21.5% in September, an increase from the 21.4% in August. The approval rating was 20.0 in June.
Two years ago, the loan approval rate from Small Banks was 50%.
Institutional Lenders
Institutional Lenders approval rates decreased to 25.6%, down from an approval rate of 25.9% in August. The rate was 25.6 in July.
Institutional Lenders had seen a steady .1% approval rate since January before the .3% increase in August.
Two years ago, the loan rate for Institutional Lenders was 66.5%.
Alternative Lenders
Alternative Lenders dipped to 27.1% in September, down from 27.3% in August. The rate was 27.1% in July.
Two years ago, the loan approval rate for Alternative Lenders was 55.9%.
Credit Unions
Credit Union loan approval rate increased to 20.5 in September, from 20.3% in August.
Credit Union rates had remained steady at 20.6% for several months before dropping to 20.5% in July.
Two years ago, the loan approval rate from Credit Unions was 39.6%.
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I have been looking for different ways to get small business loans. If the approval is going down, then it might be a while before I can apply for a small business loan and actually get it. I guess the best thing to do is wait until the approval rates go back up before applying for a small business loan. Thank you for this article and this information.