Approval rates for small business loan applications inched up to yet another record high of 27.6% at big banks ($10 billion+ in assets) in June, while the approval percentage also climbed at small banks, hitting 50% for the first time in 2019, according to the newly released Biz2Credit Small Business Lending Index.
Small bank approvals of small business loan applications climbed one-tenth of a percent from 49.9% in May to 50% in June.
Meanwhile, the Labor Department’s Jobs Report released on July 5, reported that employment nonfarm payroll employment increased by 224,000 in June, while the unemployment rate was little changed at 3.7 percent. The U.S. Bureau of Labor Statistics noted that significant job gains occurred in professional and business services, health care, transportation, and warehousing.
The NFIB Small Business Optimism Index increased in May, the most recent month reported by the NFIB, to a new record high. Capital spending plans increased along with actual outlays. Small business owners’ expectations for sales, business conditions, and expansion all rose.
Institutional lenders’ approval rates climbed to 65.6%, up one-tenth of a percent from May’s figure of 65.5%.
Small business loan approval rates among alternative lenders dropped one-tenth of a percent to 57.0% in June, down a notch from 57.1% in May.
Credit unions dropped one-tenth of a percent to a record low 40.0% loan approvals in June.
“While credit unions are increasingly partnering with the SBA on small business loans, the moves are not yet making a big impact,” said Biz2Credit CEO Rohit Arora, who oversees the Biz2Credit research. “Credit unions are still hurt by the Member Business Lending cap, which limits their loan approvals to 12.25% of their assets, and by the fact that many of them have not digitized the small business loan application process.”
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