Loan approval rates at big banks and institutional lenders improved to all-time highs in September 2016. That’s according to the latest Biz2Credit Small Business Lending Index, the monthly analysis of more than 1,000 small business loan applications on Biz2Credit.com.
Approval rates at small banks, alternative lenders and credit unions, however, saw a decline.
Biz 2 Credit Lending Index September 2016
The report has found that approval rates at big banks improved to 23.4 percent, up one-tenth of a percent from August’s figure. It marked the seventh time in the last eight months that lending approval rates jumped at big banks.
“The Federal Reserve failed to increase the interest rates that banks and other lending institutions were hoping for,” remarked Rohit Arora, CEO and co-founder of Biz2Credit in a release announcing the findings.
“While the Fed may decide to increase the interest rates at its next policy meeting, many banks are lagging behind in their loan goals for 2016. They must close more deals to meet those numbers. I expect big banks to finish strong for 2016, especially if the looming interest rate hike comes to fruition.”
Loan approval rates at institutional lenders also improved to an all-time high of 63 percent. It was the third consecutive month that institutional lenders saw increases in their approval rates.
“Right now, they (institutional lenders) are doing it faster and more efficient than anyone on the market. High yields and low default rates are attracting global investors to the marketplace as it is proving to be a hot commodity for investors,” said Arora.
Meanwhile, approval rates declined slightly at small banks to 48.7 percent. It was the first time loan approval rates dropped at small banks in back-to-back months since March 2016.
For its monthly index, Biz2Credit analyzes loan requests ranging from $25,000 to $3 million from companies in business more than two years with an average credit score above 680.
This article was curated from smallbiztrends.com.