Smart Borrower Blog

Big Banks Approve Record Number of Small Business Loans


Mar 4th, 2020 @ 1:46 PM by Amber Nelson


America’s big banks – those with $10 billion or more in assets – approved 28.3% of all small business loan applications in January, an increase of one-tenth of a percent from December and the highest level ever recorded, according to data from Biz2Credit.

“The economy is strong, and optimism among small business owners is high, which creates a fertile atmosphere for small business lending,” said Biz2Credit CEO Rohit Arora. “Interest rates remain low, which is encouraging to small companies seeking debt financing for their growth plans. The bottom line is that if your business performed well in the past two years, banks will be willing to lend.”

Institutional lenders were also more inclined to loan to small businesses in January with an increase of approvals to 66.4% from 66.2% in December 2019. On a yearly basis, approvals are up from 65.1%. “Institutional lenders keep expanding in the small business lending marketplace,” commented Arora. “They are able to offer funding at attractive rates and terms.”

Not all lenders were able to keep pace on approvals in January though. Small banks approved 50.4% of all small business applications, down from 50.6% the month before. On an annual basis however, approvals are up among small banks from 49.8% in January 2019.

“Smaller banks because they process more SBA loans, and many SBA lending partner banks are likely to wait for 2019 tax returns to be filed before granting loans,” said Arora. “This is a slight blip that happens every year in the first quarter. All signs indicate another strong year for small business growth.”

Credit unions continued to lose market share, approving a record low 39.6% of all applications, down from 39.7% in December and 40.3% a year ago.

“Credit unions are struggling in small business lending,” Arora explained. “There is no doubt that they must change the way they conduct business and upgrade their technology or partner with fintech firms. Otherwise, I can’t see them surviving. Credit unions should be able to process digital loan applications to keep up with the current lending marketplace.”


About Amber Nelson
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.

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