The year-over-year big bank approval rate for small businesses has seen an increase by nearly 52%, with a tally from 10.9% approval in August of 2012. August now marks the second straight record month for such approvals by the big banks, says a monthly analysis of 1,000 loan applications on Biz2Credit.com
Big-bank-to-small-business loan approvals jumped to an high of 17.5% in last month from 17.4% in July.
“Five years after the Great Recession, the small business lending landscape is better than at any time since 2008,” said Biz2Credit CEO, Rohit Arora who oversaw the research.
Despite the positive numbers, the general consensus is that smaller banks will be a better source for small-business loans. Approval rates rose to over 50% to 50.7% in August from a 49.4% in July.
The credit union lending also improved slightly with a 45.3% last month. That is an over 2% rise from the 45.1% the month prior. It accounts for the second consecutive month of increases for credit unions following a year of steady declines.
Lending approvals of the small-business loans dropped by to just over 63% in August, down 0.1% from July. “Banks, both large and small, are becoming more aggressive in small business lending since it has proven to be a profitable part of their portfolios,” Arora said. “Additionally, banks typically attract higher quality borrowers than credit unions and alternative lenders, so they are becoming more apt to grant loan requests.
The two straight months is good news for small businesses after a the continual drops from the start of the year that were preceded by a the second half of 2012 being equally disappointing when it came to drops. There were no intense drops, but the continual decline had been worrisome for the smaller businesses.
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