Biz2Credit Small Business Lending Index for September 2013 reports slight dip in bank approval rates for small business loans and the impact of government shutdown concerns
Loan Approvals Were on Par for Another Record High Until Anxiety Over the Government Shutdown Intensified at the End of the Month
NEW YORK, NY (October 8, 2013) — Small business loan approvals at big banks ($10 billion+ in assets) dipped slightly to 17.5% in September from the all-time index high of 17.6% in August 2013, according to the Biz2Credit Small Business Lending Index, a monthly analysis of 1,000 loan applications on Biz2Credit.com. Additionally, small banks loan approval rates dropped to 50.1% from 50.7% in August.
“Banks were aggressive in small business lending during the first half of September and were on a path to another record month of approvals. However, as the anxiety over the government shutdown began to rise, lending slowed, which accounts for the stagnation in the Index,” said Biz2Credit CEO, Rohit Arora who oversaw the research. “We expect the government shutdown to impact the figures negatively in the coming month, and the debt ceiling debate could cripple small business lending even further.”
“A major chunk of small business lending under the SBA and conventional loan programs require verification of transcripts by the IRS. This has halted, and there will be a backlog of SBA loans once the impasse has settled,” continued Arora, one of the nation’s top experts in small business finance. “Cutting off small business borrowing takes the oxygen away from small businesses, which create the lion’s share of private sector jobs in America. “This bad news comes at a fragile time in the economic recovery following the Great Recession.”
Meanwhile, credit union lending improved slightly to 45.4% from 45.3% last month. It is the third consecutive month of increases for credit unions after more than a year of steady declines. Alternative lender approvals of small business loans rose one-tenth of a percent to 63.2% from 63.1% in August.
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About the Biz2Credit Small Business Lending Index
Biz2Credit analyzed loan requests ranging from $25,000 to $3 million from companies in business more than two years with an average credit score above 680. Unlike other surveys, the results are based on primary data submitted by more than 1,000 small business owners who applied for funding on Biz2Credit’s online lending platform, which connects business borrowers with more than 1,200 lenders nationwide.
Founded in 2007, Biz2Credit has arranged more than $1 billion in small business funding throughout the U.S. and is widely recognized as the #1 online credit resource for startup loans, lines of credit, equipment loans, working capital and other funding options. Using the latest technology, Biz2Credit matches borrowers to financial institutions based on each company’s unique profile — completed in less than four minutes — in a safe, efficient, price-transparent environment. Biz2Credit’s network consists of 1.6 million users, 1,200+ lenders, credit rating agencies such as D&B and Equifax, and small business service providers including CPAs and lawyers. Visit www.biz2credit.com, follow on Twitter @Biz2Credit, and Facebook at www.facebook.com/biz2credit.