Biz2Credit’s Latest Small Business Lending Index: Small Business Loan Approval Rates at Banks Increased in July 2020

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Small business funding platform Biz2Credit announced on Tuesday its latest Small Business Lending Index has been released and revealed that the approval percentage for small business loan applications at big banks, which are more than $10 billion in assets increased three-tenths of a percent from 13.5% in June to 13.8% in July.

The approval rate at small banks was also 18.6% in July, up two-tenths of a percent to from 18.4% in June. This figure is in stark contrast with February 2020, when small business loan approvals were a robust 50.3%. Institutional lenders’ approval percentages increased to 21.9% in July, up from 21.6% in June. Loan approval rates among alternative lenders dropped three-tenths of a percent to 23.1%, down from 23.4% in June. Credit unions approved 21.2% of loan requests in July, a slight drop from 21.35% in June, a slight increase 21.2% in May 2020.

Speaking about the Index’s observations, Biz2Credit CEO, Rohit Arora, stated:

“There was clearly an uptick in the economy, especially in the northeast in July. The big banks played a key role in PPP lending and are making other loans to their customers as some of them have exhausted their PPP funds.”

According to Biz2Credit, the figures do not reflect the approval of Paycheck Protection Program (PPP) loans that are made by the government rather than by the banks themselves. However, the July figure shows an upward trend, even though approval rates are still far below the record highs earlier in 2020 before the COVID-19 pandemic hit. 

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