Biz2Credit Small Business Lending Index ™ reports loan

NEW YORK, January 12, 2021 (GLOBE NEWSWIRE) – Small businesses loan approval percentages at big banks (over $ 10 billion in assets) fell slightly, from 13.2% in November to 13.1% in December, an indication that the challenges for small business owners in need of financing continue, according to the latest Biz2Credit ™ Small Business Loan Index released today. In comparison, the big banks approved 28.2% of the funding requests they received in December 2019.

“Even though many companies are operating at a loss right now and need capital, they have refrained from applying due to the likelihood of rejection and the economic uncertainty caused by the second wave of the coronavirus,” the CEO said from Biz2Credit, Rohit Arora, one of the leading experts in small business finance. “Business leaders are eagerly awaiting the second round of Paycheque Protection Program (PPP) funding.”

Biz2Credit has also researched borrowers who have expressed interest in the PPP following the government’s recent announcement to reopen the program. Biz2Credit found that over 80% of the total loan amount requested for PPP loans came from small businesses with less than 50 employees, a significant change from the initial round in April. Biz2Credit, which enabled pre-registration for PPP2 funding before the program opened by the SBA on Jan. 11, finds that second loan applications represent around two-thirds of loan pre-applications for funding approved by the SBA. government.

United States Bureau of Labor Statistics on Friday January 8, 2021, revealed that non-farm payroll employment increased by 140,000 in December and the unemployment rate remained at 6.7%. Improvements in the labor market reflect the continued upturn in economic activity that has been hampered by the coronavirus pandemic and efforts to contain it. Notable job gains have been made in transportation and warehousing as holiday gifts hit stores and consumers. Employment also increased in professional and business services and in health care.

During December, small banks approved 18.2% requests for financing from companies, down one notch from 18.3% the previous month. In contrast, small banks granted more than half (50.6%) of financing requests last December.

The news comes as applications for the second round of the Paycheck Protection Program start accepting new applications this week from a select group of the smallest lenders on the SBA’s list of lenders approved.

“This dramatic drop is attributed to the toll the coronavirus has taken on small businesses and the economy in general,” Arora said.

In the same way, credit unions slipped a tenth of a percent to one 20.6% approval rate in December compared to 20.7% in November. A year ago, they approved nearly 40% of the applications received in December 2019.

Two categories of lenders increased slightly in December. Institutional lenders approved 22.8% financing requests in December, up slightly from 22.6% in November. Meanwhile, loan approval rates among alternative lenders slightly increased from 23.4% in November to 23.5% in December. These figures once again highlight the challenges facing small businesses in search of capital. Last December, institutional lenders approved nearly two-thirds (66.2%) of their funding requests, and alternative lenders granted 56.3% of their requests.

“Despite these two small positives, companies looking for capital find it difficult to secure it. Right now, business owners are looking to the government for help, but not all are eligible for P3s, ”said Arora. “Although the representatives of the SBA said today While the loan pool for PPP2 should be sufficient to cover qualified borrowers who apply, it is likely that many business owners will still need a lot of capital, even beyond PPP loans. They currently have no options because lenders approve so few regular loan applications.

About the Biz2Credit Small Business Loan Index
Biz2Credit analyzed loan applications from businesses that have been in business for more than two years with credit scores above 680. The results are based on primary data submitted by over 1,000 small business owners who have applied for financing on the Biz2Credit platform.

About Biz2Credit
Founded in 2007, Biz2Credit has arranged over $ 3 billion in small business financing. The company extends its cutting-edge technology into customized digital platform solutions for banks and other financial institutions, investors and service providers. Visit www.biz2credit.com or Twitter @ Biz2Credit, Facebook, and LinkedIn.

Media contact: John Mooney, (908) 720-6057, [email protected]

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