In November 2023, Big banks' loan approval rates for small businesses stagnated at 13%, a continuation since June of the same year, according to the most recent Biz2Credit Small Business Lending Index™. This stagnation contrasted with the growth seen in small banks and alternative lenders, with approval rates at small banks rising slightly to 19.7% and alternative lenders reaching a significant milestone of 30%.
These changes in lending patterns reflect a dynamic financial environment where small and alternative financial institutions are increasingly pivotal in supporting small businesses. This shift is not just a financial statistic but a signal of changing strategies in business financing during challenging economic times.
“The last time loan approvals rates from alternative lenders reached 30% was in March 2020, the month before all approval percentages were cut in half due to the COVID pandemic,” CEO of Biz2Credit Rohit Arora said. “This should be a good sign for small business owners.”
For a full understanding, you can read the article on Yahoo Finance: Small Business Loan Approvals Stalled at Big Banks, Rose at Small Banks and Alternative Lenders in November 2023.
In an earlier article from Yahoo, research from Biz2Credit showed that in 2022 Accommodation & Food Services and Healthcare & Social Assistance had the highest approval rate for all financing applications at 37%. After that, it was Manufacturing (32%), Wholesale Trade (31%), and IT (30%).
