Banks’ Small Business Loan Approval Rates Hit Record High in December 2019: Biz2Credit Small Business Lending Index™

World News: . []

NEW YORK, Jan. 14, 2020 (GLOBE NEWSWIRE) -- The approval percentage for applications at ($10 billion+ in assets) rose one-tenth of a percent to reach in December 2019, a new post-recession record high, according to the released today.

“A lot of businesses apply for funding at the end of the year since a time when companies are looking forward at their growth plans,” said Biz2Credit CEO Rohit Arora, who oversees the monthly research. “Interest rates are low, thanks to cuts by the Fed, and the strong economy the climate is near perfect for small businesses to borrow for growth. If you have a solid business, banks have been willing to lend.”

Private sector employment increased by 145,000 in December, while the unemployment rate remained at 3.5%, according to the Bureau of Labor Statistics’ issued on Friday, Jan. 10, 2020. Notable job gains occurred in the retail trade during the holiday shopping season and in healthcare and food and hospitality. Many of these jobs are created by small businesses.

The 2019 Fiscal Year was a great year for SBA lending, and Biz2Credit expects this trend to continue. The approval rate at , which often are SBA-approved lenders, climbed one-tenth of a percent from 50.5% in November to in December.

“Lending a regional and community banks is still strong. Smaller banks process a lot of SBA loans, which reached record levels in 2019,” Arora explained. “Regional and community banks cannot rest on their laurels, however. As big banks remain active and invest in digital loan application technology, smaller banks must either partner with FinTech companies or spend to develop their own systems.”

“Institutional lenders are a good source for small business funding. They offer financing at reasonable interest rates and are becoming an increasingly important source of capital for entrepreneurs,” Arora said.

Small business loan approval rates among remained at in December.

“Alternative lenders are a consistent source of capital for companies that need money quickly or that don’t qualify for bank loans,” Arora said. “Alternative lenders can help companies during times of short-term cash crunches, but the interest rates they charge are higher than other lenders.”

The approval percentage rate for remained unchanged at in December, tying the record low recorded in September 2019.

“In order to survive today, credit unions need to change their business models, invest in technology or partner with so that they can process digital loan applications, and eliminate membership applications,” said Arora, who oversees the Biz2Credit research. “Credit unions are doing business in an old-fashioned way, and it hinders their relevance in today’s lending marketplace.”

Biz2Credit analyzed loan requests from companies in business more than two years with credit scores above 680. The results are based on primary data submitted by more than 1,000 small business owners who applied for funding on Biz2Credit's platform.

Founded in 2007, Biz2Credit has arranged more than $2 billion in small business financing The company is expanding its industry-leading technology in custom digital platform solutions for banks and other financial institutions, investors and service providers. Visit or Twitter @Biz2Credit,  , and .

More news and information about Biz2Credit

Published By:

Globe Newswire: 14:38 GMT Tuesday 14th January 2020

Published: .

Search for other references to "banks" on SPi News


Share

Previous StoryNext Story

SPi News is published by Sector Publishing Intelligence Ltd.
© Sector Publishing Intelligence Ltd 2020. [Admin Only]
 
Sector Publishing Intelligence Ltd.
Agriculture House, Acland Road, DORCHESTER, Dorset DT1 1EF United Kingdom
Registered in England and Wales number 07519380.
 
Privacy Policy | Terms and Conditions | Contact Us