Small business loan approvals in major banks improved again last month to reach a new high after the recession. According to the Biz2Credit Small Business Loan Index, the big banks approved 25% of small business loan applications in October 2017, two tenths of a percentage more than the previous month's high.
Biz2Credit Loan Index October 2017
"Large bank loans to small businesses continue to rise to the point where one in four loan applications are approved. At the darkest moment of the credit crisis after the recession, they granted less than one in ten requests. We have come a long way, "said Biz2Credit General Manager Rohit Arora, who oversaw the research.
In September, Biz2Credit's monthly analysis of loan approval rates in major banks allowed to obtain 24.8% of small business financing applications.
"The big banks make a lot of traditional small business loans, which take less time to process than SBA loans, and they also give a lot of requests for working capital," added Arora.
Part of the reason why big banks approve a lot of loan applications is because stock markets continue to perform well, says Arora. Trump's tax reduction plan is also considered good news for business owners.
Meanwhile, small bank loan approvals for small businesses declined slightly last month.
Percentage Approval of Small Bank Loans
In small banks, approval percentages dropped to 48.9% in October from 49.1% in the previous month.
"Despite lower approval percentages, smaller banks still process a large number of SBA-backed loans," Arora said. "Nearly half of small businesses' requests for financing from small banks are approved."
Loan approval rates among alternative lenders also fell two tenths of a percent to 56.8 percent in October. Loan approval rates of credit unions have also fallen from one-tenth of a percent to 40.2%, a new low for lenders in this category.
However, institutional lenders have approved a whopping 64 percent of applications for small business financing, which represents a new high for the Biz2Credit Small Business Loans Index category.
Now is the time to apply for a commercial loan
The Biz2Credit Small Business Lending Index analyzes over 1,000 small business loan applications on Biz2Credit.com, providing a useful monthly index of loan approval rates to small businesses. This year's loan indices indicate that the time has come to apply for a commercial loan to banks.
"Entrepreneurs are more likely to obtain financing today than at any other time in the last decade," says Arora, recognized as one of the leading country experts in financing small businesses.
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