Big banks are now approving one-in-five small business loan applications, a post-recession high, according to the Biz2Credit Small Business Lending Index, the monthly analysis of 1,000 loan applications on Biz2Credit.com for
Small business loan approval rates at big banks (
"The strong return of banks in small business lending indicates three things: overall improving economy, entrepreneur confidence that they will be able to borrow for expansion and repay the loans, and the increasing ease and popularity of SBA lending," explained Biz2Credit CEO
"Higher EBITDA (earnings before interest, taxes, depreciation, and amortization) that small businesses are showing in their financial documents substantially increases their chances of securing conventional financing. They are using this funding for upgrades such as building and equipment purchases. The types of purchases that small business owners are making are an excellent sign for the U.S. economy," added Arora, one of the nation's leading experts in small business lending.
The Biz2Credit Small Business Lending Index also reported that approval rates by credit unions and alternative lenders were relatively unchanged, while institutional lenders continued slow but steady growth in approval percentage. In June, loan approval rates at credit unions improved slightly to 43.7% from 43.6% in May, while approval rates by alternative lenders slipped for the fifth consecutive month to 63.2% in June, from 63.3% in May
"Entrepreneurs are getting funding from banks at attractive interest rates. They no longer need to borrow at any cost," explained Arora. "Alternative lending, because of its high interest rates seems to be waning as traditional lenders return to the marketplace."
Institutional lenders granted 59.2% of the funding requests they received in June, a slight increase from 59.1% in May. These institutions include insurance companies, credit funds, family funds, and other yield-hungry, non-bank financial institutions. They typically offer more competitively priced loan options than alternative lenders in amounts up to
To view the historic chart of the Biz2Credit Small Business Lending Index, visit http://www.biz2credit.com/small-business-lending-index/june-2014.html.
About the Biz2Credit Small Business Lending Index
Biz2Credit analyzed loan requests ranging from
Founded in 2007, Biz2Credit has arranged more than
Read the full story at http://www.prweb.com/releases/smallbusiness/lending/prweb12000909.htm
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