The approval percentage for small business loan applications at big banks ($10 billion+ in assets) rose one-tenth of a percent to 28.3% in January 2020, setting another new post-recession record high, according to the most recent Biz2Credit Small Business Lending Index™.
The economy is strong, and optimism among small business owners is high, which creates a fertile atmosphere for small business lending. Interest rates remain low, which is encouraging to small companies seeking debt financing for their growth plans. The bottom line is that if your business performed well in the past two years, banks will be willing to lend.
Additionally, institutional lenders’ approval rates rose two-tenth of a percent from December’s figure of 66.2% to 66.4% in January 2020, according to Biz2Credit’s monthly research. Institutional lenders keep expanding in the small business lending marketplace. They are able to offer funding at attractive interest rates and terms.
Meanwhile, the approval rate at small banks dipped two-tenths of a percent from 50.6% in December to 50.4% in January. This is not unusual for this time of year; smaller banks process many SBA loans, and many SBA lending partner banks are likely to wait for 2019 tax returns to be filed before granting loans. Small banks are still approving more loan requests than they decline, and all signs indicate another strong year for small business growth.
According to the Bureau of Labor Statistics’ Jobs Report, 225,000 new jobs were created in January, and employment rose slightly to 3.6% because labor force participation rate increased to 63.4%. Many of these jobs are created by small businesses. Meanwhile, new U.S. jobless claims fell to 202,000, a 50-year low, while private payrolls soared by 291,000 in January, the largest gain in nearly five years.
“Small businesses are investing, expanding, and creating new jobs, and more underrepresented Americans are experiencing upward economic mobility as a result. Income inequality is shrinking, and wages are rising fastest among workers who have historically been left behind, including low-income women, African Americans and Latinos,” said SBA Administrator Jovita Carranza. “The jobs report is welcome news for America’s 30 million small businesses.”
According to the Bureau of Labor Statistics’ Jobs Report, 225,000 new jobs were created in January, and employment rose slightly to 3.6% because labor force participation rate increased to 63.4%. Many of these jobs are created by small businesses. Meanwhile, new U.S. jobless claims fell to 202,000, a 50-year low, while private payrolls soared by 291,000 in January, the largest gain in nearly five years.
“Small businesses are investing, expanding, and creating new jobs, and more underrepresented Americans are experiencing upward economic mobility as a result. Income inequality is shrinking, and wages are rising fastest among workers who have historically been left behind, including low-income women, African Americans and Latinos,” said SBA Administrator Jovita Carranza. “The jobs report is welcome news for America’s 30 million small businesses.”
