Loan approval rates continue to rise slowly, but not fast enough, according to the Biz2Credit Lending Index, published April 12. “Small business lending has not yet fully recovered,” said Rohit Arora, CEO of Biz2Credit. “This is disappointing news for companies looking to grow their business.”
The report lists loan approval rates through March 2022. While approval rates are increasing, they are increasing incrementally, only one-tenth of a percentage per month.
April Biz2Credit Small Business Lending Index
Supply chain problems affect the timing of loans, Arora said: “Small businesses sometimes need to borrow money when there is inventory,” he said. “And buy more than they would normally need to cover shortages.”
Arora added that he doesn’t see the loan timing/need problem ending until supply chain issues ease, which is “very difficult for small businesses.”
Major banks (those with more than $10 billion in assets) achieved an approval rating of 14.9% in March, up from 14.7 in February and 14.5% in January.
Two years ago, loan approval rates for major banks were 28.3%.
The approval score for small banks rose to 20.6% in March, compared to 20.5% in February. Two years ago, the loan approval rate from Small Banks was 50%.
Institutional lenders saw the approval rate rise incrementally from 25.1% in January, 25.2% in February, to 25.3% in March.
Two years ago, the borrowing rate for Institutional Lenders was 66.5%.
Alternative Lender approval rates rose from 26.5% in February to 26.6% in March. Two years ago, the approval rate for alternative lenders was 55.9%.
Credit Union loan approval rates, which had been flat for two months (20.7%), declined slightly to 20.6%. Two years ago, the credit union loan approval rate was 39.6%.
How Biz2Credit compiles the report
Biz2Credit analyzes credit applications from companies that have been in business for more than 2 years and that also have a credit rating of 680 points or higher. Biz2Credit collects data from more than 1,000 companies to prepare the report.
This post Small business approval rates are rising, but not fast enough was original published at “https://smallbiztrends.com/2022/04/biz2credit-small-business-loan-lending-index-april-2022.html”