Small businesses need access to capital right now and they are having a hard time finding it through loans.
While small business loan approval rates at some lenders have only increased slightly, according to Biz2Credit’s latest loan report for September, access to capital remains a challenge.
Biz2Credit CEO and co-founder Rohit Arora said small businesses continue to face challenges from Covid issues – such as supply chain issues – as well as a tight labor market . Add in rising interest rates and it’s a tough climate for small businesses.
“With ever-increasing increases in interest rates, this is now a difficult nexus for small businesses seeking capital for growth,” Arora said. He added that small businesses need access to capital to survive.
Small Business Loan Approval Rates in September 2022
Biz2Credit is an online lending platform and publishes monthly loan approval rate reports. The Monthly Loan Index is based on loan applications from 1,000 small business owners. The report includes loan approval rates through September 2022.
Biz2Credit Small Business Loan Index Key Data
Although some rates fell, they returned to the levels of previous months.
Loan approval rates at big banks (those with more than $10 billion in assets) fell to 14.9%, the second consecutive month of decline. The drop in August was the first since February 2022.
Two years ago, loan approval rates for major banks were 28.3%.
The approval rating for small banks rose to 21.5% in September, up from 21.4% in August. The approval rating was 20.0 in June.
Two years ago, the loan approval rate for small banks was 50%.
Approval rates for institutional lenders fell to 25.6%, down from an approval rate of 25.9% in August. The rate was 25.6 in July.
Institutional lenders had seen a steady 0.1% approval rate since January before August’s 0.3% increase.
Two years ago, the lending rate for institutional lenders was 66.5%.
Alternative lenders fell to 27.1% in September from 27.3% in August. The rate was 27.1% in July.
Two years ago, the loan approval rate for alternative lenders was 55.9%.
The credit union loan approval rate rose to 20.5 in September from 20.3% in August.
Credit union rates had held steady at 20.6% for several months before dropping to 20.5% in July.
Two years ago, the credit union loan approval rate was 39.6%.
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