Small Business Loan Approval Rates Continue to Rise at All Lenders

Loan approval rates from all types of lenders are slowly rising, according to Biz2Credit’s Small Business Lending Index for December 2021.

Institutional lenders, major banks, small banks, credit unions and alternative lenders all saw modest growth in loan approvals from November 2021 to December 2021.

Alternative lenders saw the strongest growth, modest gains from 25.8% in November to 26.1% in December.

Alternative Lenders

Why have alternative lenders led the way in loan approvals?

“After the PPP, banking activity in lending to small businesses has been slow,” said Rohit Arora, CEO of Biz2Credit. “However, as government lending programs come to an end and interest rates are expected to rise, it will become more profitable to lend to banks.”

big banks

The approval rating for large banks (with assets over $10 billion) rose to 14.3% from 14.2% in November.

small banks

Small banks’ approval rating grew to 20.1% in December, compared to 19.9% ​​in November.

Is the growth of large and small banks encouraging? Yes and no. Although loan approval rates are growing slowly and steadily, with no declines throughout the year, the increases pale in comparison to the statistics from two years ago.

Arora noted that two years ago, the big bank’s approvals were 28.2% while the small banks’ approvals were 50.6%.

“Things are not back to normal because the virus did not allow it,” Arora said. “We thought with vaccination that Covid would reduce it from being a problem, but that hasn’t happened.”

Institutional Lenders

Lending institutions saw their approval rate gradually rise from 24.8% in November to 24.9% in December.

Institutional lenders and alternative lenders together approved 51% of small business loan applications.

credit unions

Credit union approval rates remained the same from November to December at 20.6%.

How Biz2Credit compiles the report

Biz2Credit analyzes loan applications from small businesses that have been in business for more than two years. To be included, small businesses also have a credit rating of 680 or higher. Biz2Credit collects data from more than 1,000 companies to prepare the report. For more information, go to

Photo: Depositphotos

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