Small Business Bank Loan Approvals Dropped Dramatically in March: Biz2Credit Stu… – Press Release

[ad_1]

NEW YORK, April 11, 2023 (GLOBE NEWSWIRE) — Small business loan approval percentages at big banks slipped again, falling from 14.2% in February to 13.8% in March, according to the latest Biz2Credit Small Business Lending Index released today. This marks is the lowest figure for big banks since July 2021.

Meanwhile, approval rates of business loan applications at small banks also dropped more than two percentage points from February’s figure of 21.3% to 19.1% in March.

As bank lending to small businesses declined, approvals at non-bank lenders rose in each of the categories monitored by the Biz2Credit Index.

  • Alternative lenders climbed to 28.4% in March, up from 27.9% in February.
  • Institutional investors granted 26.5% of funding requests, up from 26.3% in February.
  • Credit unions reversed a year-long decline in approval percentages by rising to 20.2% in March from 20.0% in February.

“The collapse of Silicon Valley Bank (SVB) shook the confidence of small business owners. Many of them rushed to take their deposits out of small and midsize banks. That development hurt the banks’ ability to lend. Thus, it has become even harder for companies to secure capital,” said Rohit Arora, CEO of Biz2Credit, one of the nation’s leading experts in small business finance and fintech.

Arora noted that there was a big difference in the approval rates at banks during the first ten days before the Silicon Valley Bank (SVB) and Signature Bank collapses and the final days of March, when approvals plummeted as businesses pulled deposits from small and midsized banks.

“Even though the large majority of small businesses did not lose their deposits, their faith in the banking system became shaken,” Arora added. “Many SMBs moved their money out of smaller banks when they had amounts in excess of the $250,000 FDIC insurance threshold. They put their money into bigger banks.”

“Although small business owners won’t get the level of service at big banks that they received at smaller banks, they…

[ad_2]