Biz2Credit’s Small Business Lending Index for March indicates that loan approval rates rose during the month at banks as well as some non-bank lenders.
Loan approvals at larger banks ($10m + in assets) reportedly rose from 14.7% in February to 14.9% in March, and small banks’ approvals also increased from 20.5% in February to 20.6%.
Some non-bank lenders saw approval percentages clim with institutional lenders approving 25.3% of funding requests in March, up one-tenth of a percent from 25.2% in February.
Alternative lenders’ approval rates rose from 26.5% in February to 26.6% in March.
Credit unions fell one-tenth of a percent to 20.6% in March after being stagnant for two months.
Biz2Credit CEO Rohit Arora, said that when COVID 19 hit in March 2020 loan approvals were almost double what they are today:
“Two years later, small business lending still has not fully rebounded. This is disappointing news for companies looking to grow their businesses. Because of supply chain issues, small businesses are sometimes having to borrow money when inventory is available and buy more than they typically would need in order to hedge against shortages. I don’t see this changing until supply chain issues ease. Big corporations can weather the storm. It is harder for SMBs.”
At the same time, Biz2Credit noted that total nonfarm payroll employment rose by 431,000 in March, and the unemployment rate declined to 3.6%, according to the Jobs Report released by the U.S. Bureau of Labor Statistics on Friday, April 1. Notable job gains continued in leisure and hospitality, professional and business services, retail trade, and manufacturing. Many of these jobs are created by small businesses.