SMALL BUSINESS NEWS
Small businesses have a better bet seeking loans with small banks
than with big ones. Small business loan approval drops to 18.8
percent at big banks in March. (Those are banks with assets of
$10 billion or more.) The new figure represents a drop from 19.1
percent in February.
than with big ones. Small business loan approval drops to 18.8
percent at big banks in March. (Those are banks with assets of
$10 billion or more.) The new figure represents a drop from 19.1
percent in February.
The drop in lending at bigger banks is not part of an overall
slowdown in lending either. A year-over-year comparison
shows lending increased by 20 percent at big banks over
the last year overall. The figures come from the Biz2Credit
Small Business Lending Index.
slowdown in lending either. A year-over-year comparison
shows lending increased by 20 percent at big banks over
the last year overall. The figures come from the Biz2Credit
Small Business Lending Index.
The index is based on a monthly analysis of 1000 loan
applications on Biz2Credit.com.
applications on Biz2Credit.com.
In a prepared release issued with the monthly index report,
Biz2Credit CEO Rohit Arora explains: “Big banks rely on tax data to
process non-SBA loans. Since tax season is always a busy time of the
year for CPAs who are preparing tax returns, they have less time to pull
together statements for business owners seeking loans. This slows the
loan application process. Big banks typically process more conventional
loans from larger firms than SBA Loans, which are more popular with
companies that need less than $350,000.”
Biz2Credit CEO Rohit Arora explains: “Big banks rely on tax data to
process non-SBA loans. Since tax season is always a busy time of the
year for CPAs who are preparing tax returns, they have less time to pull
together statements for business owners seeking loans. This slows the
loan application process. Big banks typically process more conventional
loans from larger firms than SBA Loans, which are more popular with
companies that need less than $350,000.”
At the same time, small business loans at small banks are on the
upswing. Loan approvals for small businesses at small banks rose
from 51.4 percent to 51.6 percent over the same period.
upswing. Loan approvals for small businesses at small banks rose
from 51.4 percent to 51.6 percent over the same period.
Rohit gave one possible reason for the increased lending at these
smaller institutions. That would be the increased popularity of the
Small Business Administration’s Small Business Loan Program and
SBA Express with these lenders. The SBA offers to guarantee up to
85 percent of these loans with no guarantee fees, which Rohit says
has made them very popular.
smaller institutions. That would be the increased popularity of the
Small Business Administration’s Small Business Loan Program and
SBA Express with these lenders. The SBA offers to guarantee up to
85 percent of these loans with no guarantee fees, which Rohit says
has made them very popular.
However, another reason could be the increased flow of higher
quality borrowers who are less interested in alternative lenders like
merchant advance services as the economy improves. Rohit says
these borrowers are increasingly shopping around for better lending
rates and terms with small banks and institutional lenders like credit
funds and insurance companies.
quality borrowers who are less interested in alternative lenders like
merchant advance services as the economy improves. Rohit says
these borrowers are increasingly shopping around for better lending
rates and terms with small banks and institutional lenders like credit
funds and insurance companies.
Learn more about what it takes to qualify for a small business loan by
visiting theBiz2Credit tool on Small Business Trends.
visiting theBiz2Credit tool on Small Business Trends.
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