The Biz2Credit Small Business Loan Index for May 2018 reports record levels of loan approval by banks and institutional lenders.
Biz2Credit Loan Index May 2018
High records reflect a strong US economy and growth in employment. The Bureau of Labor Statistics reports that the unemployment rate is currently 3.8%. And wage growth is also experiencing the highest rate in two years according to the latest Markche Small Business Paychex / IHS job market study.
For small business owners and entrepreneurs looking to expand or start their business, it's a good time. Biz2Credit CEO Rohit Arora addressed this point in the report. He said: "The US economy is strong right now." This benefited the banks, making another strong month.
Arora added: "The unemployment rate has reached its lowest level in 18 years, and the average hourly wage has increased 2.7% over the previous year In particular, the Labor Department reported that employment in construction continued its upward trend in May with the creation of more than 25,000 new jobs, and there were also large increases in employment. manufacturing, transportation and storage. "
The index is derived from the monthly analysis of more than 1,000 credit applications emanating from small businesses on Biz2Credit.com.
Biz2Credit Small Business Loan Index Data
The approval rate of the major banks climbed to 25.9%, up two tenths of a percent from April. And according to Biz2Credit, it is a peak after the recession for the big banks.
The growth of the big banks was also offset by the growth of small banks, with a jump of two tenths of a percentage, bringing the overall approval rate of small businesses to 49.4%. For this segment, this rate was the highest since 2015.
Institutional lenders, which generally have a high approval rate for small business loans, increased by one-tenth of a percent to 64.7 percent. Biz2Credit reports this is yet another new index record for this group.
Alternative lenders and credit unions have not experienced the same growth as other lenders in this index. While alternative lenders remain the same as in April with a 56.4% approval rate, the rate of credit unions is down from one-tenth of a percent to 40.1%
The infographic of the Biz2Credit Small Business Loan Index below provides more data for the month of May.
Image: Biz2Credit