Loan approval percentages at banks, institutional lenders, and alternative lenders have risen in every month of 2022
Small business loan approval percentages at big banks ($10m + in assets) inched upwards from 15.3% in May to 15.4% in June, while small banks’ approvals also rose from 20.9% in May to 21.1% in June, according to the latest Biz2Credit Small Business Lending Index™ released today. Loan approves by banks have increased during every month of 2022.
Latest Fintech News: Passport Parking App in Use Across Eastern Massachusetts
Among non-bank lenders, approval percentages improved slightly, even as credit union lending approvals dipped:
- Institutional lenders approved 25.6% of loan requests in June, up one-tenth of a percent from 25.5% of loan requests in May.
- Alternative lenders’ approval rates rose from 26.9% in May to 27.1% in June.
- Credit unions slipped slightly from 20.6% in May to 20.5% in June.
“With the exception of credit unions, the approval rates for all categories of lenders inched higher last month,” said Biz2Credit CEO Rohit Arora, one of the nation’s leading experts in small business lending and fintech. “We are nowhere near pre-pandemic approval percentages, however. Still, these are positive signs.”
Latest Fintech News: Blockchain Data Management Systems Can Transform Patent Claims: HashCash CEO Raj Chowdhury
“While the cost of capital for small businesses is rising because most small business funding comes at variable rates, borrowers need capital for growth,” added Arora. “Fortunately, they can find it at a variety of lending sources.”
Total nonfarm payroll employment rose by 372,000 in June, higher than many economists expected, while the unemployment rate remained at 3.6%, according to the Jobs Report released by the U.S. Bureau of Labor Statistics released on Friday, July 8, 2022. Notable job gains occurred in professional and business services, leisure and hospitality, and health care. Many of these jobs are created by small businesses.
“With unemployment so low, small business owners are still struggling to find workers. This, naturally, is driving up the cost of labor as demand outweighs supply,” Arora says. “Rising labor costs, combined with 8.6% inflation in May 2022, continues to put a financial crunch on small companies.”
Latest Fintech News: TradeStation Crypto Expands Trading Support for Six Additional Coins
[To share your insights with us, please write to sghosh@martechseries.com]
