Home Small Business Bank approval for non-PPP loans increased slightly

Bank approval for non-PPP loans increased slightly


Small business loan approval rates are slightly increasing. The latest increase in non-PPP lending to small businesses has been announced Biz2Credit Small Business Loan Index based on March 2021 data. Since mid-January, Biz2Credit has become the leading PPP application processing unit in the United States.

Lending by major banks increased to 13.5% in March 2021. This increase is good news for the small business community, when in February 2021 it was at 13, 3%. This is only an increase of 0.1% compared to January 2021.



Small business loan index – April 2021

However, the slight increase in non-Payment Protection Program (PPP) lending since the beginning of the year is in sharp contrast to the peak a year ago, when loan approval rate for small businesses from large banks stood at 28.3%.

Rohit Arora, CEO of Biz2Credit, and a leading expert in the SME finance sector, commented on this result: “Lending to traditional large banks increased slightly in March, but Small business loans are still much more difficult today than they were before the pandemic.

“Right now, banks are focusing on making Loan Protection Program (PPP) loans available to small businesses. These loans are backed by the Treasury, so there is little risk to them, ”added Rohit.

Replacement loans are also on the rise

Loans from sources other than major banks also increased slightly in March 2021. Smaller bank approvals rose one notch from 18.2% in February 2021 to 18.3% in March. However, this was very different until March 2020, when small banks approved 38.9% of small business loan applications.

A similar situation was found in credit union lending, which increased from 20.3% in February to 20.4% in March 2021. One year ago, the credit union. Approved 23.2% of applications for loans from small businesses.

Replacement lending also increased by 1/10% in March from 23.8% in February to 23.9% in March 2021.

Positive signs on the labor market

Non-PPP lending to small businesses increased slightly with positive news about the labor market. The Biz2Credit report, which cited data from the Bureau of Labor Statistics, shows that non-farm payroll employment increased by 916,000 by March 2021.

The unemployment rate has also fallen, according to data released by the Bureau of Labor Statistics on April 2, 2021, the unemployment rate in the US has fallen to 6%. Many jobs have been created by small businesses, with entertainment and hospitality leading the way in terms of job growth.

Statistics show that the US economy is starting to flourish and small businesses are showing signs of recovery. However, in terms of financial resources, the report states that PPP lending is still more dominant than SME lending. With the number of non-PPP loan approvals still significantly lower than before the pandemic, small businesses are still facing challenges when it comes to financial security.

Photo: Depositphotos




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