Small business funding platform Biz2Credit announced on Tuesday its latest Small Business Lending Index has been released and revealed small business loan approval percentages at big banks ($10 billion+ in assets) dropped slightly from 13.6% in August to 13.5% in September, indicative of the struggles that small businesses are facing. According to Biz2Credit, the Index figures do not reflect approval of the Paycheck Protection Program (PPP) loans that were approved by the SBA and Treasury.
“PPP lending ended on August 8 after providing nearly 5 million companies with $531 billion in what was expected to be ‘forgivable loans.’ However, thus far, few borrowers have received confirmation that their PPP loans won’t have to be paid back.”
Biz2Credit also explained that during the month of September, small banks approved 18.5% of funding requests, unchanged from August. Meanwhile, credit unions slipped one-tenth of a percent from 21.1% in August to 21.0% in September. Speaking about the Index, Biz2Credit CEO Rohit Arora, stated:
“It’s not reasonable to expect that firms will apply for funding before they find out whether they are on the hook for repaying their initial round of PPP funding. If they must repay loans they thought would be absolved by the government, they won’t look to borrow more. Unfortunately, many businesses are at a life-and-death stage right now if they do not get an infusion of capital.”
Biz2Credit then added two categories of lenders rose slightly. Institutional lenders saw an uptick in approval percentages from 22.0% in August to 22.2% in September. Meanwhile, loan approval rates among alternative lenders increased one-tenth of a percent from 23.0% in August to 23.1% in September.
