NEW YORK, June 8, 2021 (GLOBE NEWSWIRE) – Small Business loan approval interest in big banks ($ 10 billion in assets) rose slightly from 13.4% in April to 13.5% in May 2021, according to the latest Biz2Credit Small Business Lending Index™ released today. However, small banksapprovals jumped from 18.2% in April to 18.7% in May.
“Approved loans by small banks rose 0.3% as banks begin to assess the favorable economic conditions that are beginning to manifest as quarantines ease and more and more people are receiving the COVID-19 vaccine,” said Biz2Credit CEO Rohit Arora. one of the leading national experts in small business finance. “Accumulated consumer demand is an attractive narrative for small business owners to use as part of their rationale for applying for funding. Banks, especially small communities and regional institutions, are paying attention to this trend as they begin to open their lending operations to the post-pandemic reality. ”
Lending numbers next month will be significant now that the federal government Payroll Protection Program (PPP) completed the second round.
“Businesses that are still not recovering from the economic fallout from the pandemic will have to look for other sources of funding,” Arora explained. – Look for business loans – especially loans from online or digital providers – to see a surge in activity now. that the PPP is closed. “
Total non-farm employment rose 559,000 in May and the unemployment rate fell 0.3 percentage points to 5.8 percent, the US Bureau of Labor Statistics reported on Friday, June 4. A noticeable increase in jobs has occurred in the field of leisure and hospitality, in public and private education. as well as in the field of health care and social assistance. Many of these jobs are created by small businesses.
CRedit unions increased from 20.3% in April to 20.4% in May 2021. However, other non-bank lenders rose slightly. Iinstitutional lenders approved 23.6% funding applications in May, slightly up 23.5% in April.
Meanwhile alternative lenders approved 24.3% funding applications in May 2021, up from 24.0% in April.
“Alternative lenders saw a significant increase in approvals in May, while processing an increasing number of loan requests thanks to a shift towards online financing for small businesses,” Arora said. “With PPPs in place, banks are focusing on forgiveness and may not be ready to ramp up lending to small businesses that are not supported by the state.”
“Borrowers will have to turn to non-bank financing sources, including alternative lenders, institutional lenders and credit unions,” he added. “All of these lenders are starting to respond to demand, and many of them will have a rise in approval rates as clients who used to get loans from the bank are now looking for alternative sources of funding.”
Biz2Credit analyzed loan applications from companies with more than two years of credit rating above 680. The results are based on raw data provided by over 1,000 small business owners who applied for funding on the Biz2Credit platform.
Founded in 2007, Biz2Credit has organized over $ 3 billion in small business financing. The company is expanding its cutting edge technology to create customized digital platform solutions for banks and other financial institutions, investors and service providers. Visit www.biz2credit.com or Twitter @ Biz2Credit, Facebook, as well as LinkedIn…
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