Biz2Credit announced on Tuesday the release of its latest Biz2Credit Small Business Lending Index, which revealed that the approval percentage fo small business loan applications at big banks (which are $10 billion+ in assets) inched up one-tenth of a percent to reach 28.1% in November 2019.
Biz2Credict reported the private sector, nonfarm employment rose by 266,000 in November, while the unemployment rate was little changed at 3.5 percent, according to the U.S. Bureau of Labor Statistics’ Jobs Report issued last week. Employment rose in manufacturing, reflecting the return of workers from a strike. Notable job gains occurred in health care and in professional and technical services. Many of those jobs were created by small businesses. While sharing more details about the latest index’s observations, Biz2Credit CEO, Rohit Arora, stated:
“Interest rate cuts by the Federal Reserve, optimism among small business owners, and an overall strong economy account for an incredibly strong for small business lending. If you are a small business owner considering investing money in your firm, you may not see a time better than now.”
Biz2Credit also revealed that during the recently completed Fiscal Year 2019, SBA loan volume exceeded $28 billion with more than 63,000 approved loans. The approval rate at small banks, which often are SBA-approved lenders, also climbed one-tenth of a percent from 50.4% in October to 50.5% in November. Arora further explained:
“Small banks continue to approve more loan requests than they reject – for both traditional bank loans and SBA loans. As business owners look ahead and consider their growth path for 2020, I expect that small business lending at regional and community banks will be strong into the foreseeable future.”
Meanwhile, Institutional lenders’ approval rates again inched up by one-tenth percent, reaching 66.1%, up a notch from October’s figure of 66%. Small business loan approval rates among alternative lenders slipped a notch to 56.3% last month from 56.4% in October. The approval percentage rate for credit unions remained unchanged at 39.8% in November, only slightly above the record low of 30.7% recorded in September 2019. Arora went on to add:
“Credit unions are in danger of becoming irrelevant in small business lending. Some of them are making investments in to digital technology so that they can process online loan applications, but many of them have not. They are falling behind as a category of lenders for this reason. Credit unions are technologically behind banks and other lenders, some of them may not be able to survive unless they partner with FinTech platforms that can provide digital capabilities.”