NEW YORK, Aug. 09, 2022 (GLOBE NEWSWIRE) — Small business loan approval percentages at small banks rose from 21.1% in June 21.2% in July while permits at big banks (over $10M in assets) fell from 15.4% in June 15.3% no later than July Biz2Credit Small Business Lending Index™ published today.
For non-bank lenders, approval percentages improved slightly, while credit approvals from credit unions declined:
- IInstitutional Lenders approved 25.8% of loan requests in July, up from 25.6% in June. Approvals in this credit category increased steadily in 2022.
- Alternate Lenders Approval ratings rose from 27.1% in June 27.2% in July.
- credit unions fell from 20.5% in June 20.4% in July.
“Licenses at major banks have declined somewhat after months of steady increases. This is likely due to concerns about a potential recession after the Federal Reserve hiked interest rates by 75 basis points to control inflation,” said Rohit Arora, CEO of Biz2Credit, one of the country’s leading experts on small business lending and fintech . “Small banks processing many SBA loans remain a good source of capital. For companies that need money faster, non-bank lenders remain a good option.”
“Small business lending at credit unions continues to falter,” Arora added. “Fortunately, their approval percentages are about half what they were just before the pandemic and have shown little growth this year.”
Total nonfarm payrolls rose by 528,000 in July and the unemployment rate fell to 3.5%, according to the U.S. Bureau of Labor Statistics jobs report released on Friday, August 5, 2022. Employment growth was widespread, led by gains in leisure and hospitality, professional and business services, and healthcare. Both total non-farm payrolls and the unemployment rate have returned to pre-pandemic February 2020 levels. Many of these jobs are created by small businesses.
“Small business owners continue to face challenges in finding workers. Demand for labor drives up wages, affecting the bottom line of many small businesses. Labor costs are typically a company’s largest expense,” says Arora. “Meanwhile, inflation remains high, bringing small business owners a financial crisis.”
Biz2Credit analyzed loan requests from companies that have been in business for more than two years and have a credit score 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 July 2022, click here.
Founded in 2007, Biz2Credit has arranged over $7 billion in small business financing. The company extends its industry-leading technology into custom digital platform solutions for banks and other financial institutions, investors and service providers. Visit www.biz2credit.com or Twitter @Biz2Credit, Facebook and LinkedIn.
Contact: John Mooney, (908) 720-6057, [email protected]