Earlier this month we shared with you how approvals for small business loans in April had grown from 21.6 percent to 21.7 percent of applications filed with big banks — a modest uptick at first glance, but one that broke the approval rate record (the 21.6 percent set just the month before) and also marked the sixth straight month in which approvals had gone up. Now new data shows that that good news continued on into May as well, representing seven consecutive months — and 13 out of the last 14 months — in which small business approval loans have risen.
Those figures, released by Biz2Credit, reveal that small business loan approvals granted by big banks continued to edge higher into May, reaching a new record of 21.9 percent of applications approved. As Rohit Arora, chief executive for Biz2Credit, tells NerdWallet, not only does this establish seven straight months of continually growing approvals, but is likely indicative of even further month-over-month growth to be seen over the next two years.
Traditional banks weren’t the only ones who had increased their volume of approved loan requests. Applications filed with, and approved by, institutional lenders such as insurance companies and credit funds also exhibited a healthy increase from 61.1 percent approved in April to 61.3 percent in May.
Despite the good news, some concerns have emerged that increasing application approvals by too much could end up undermining lending standards in the future. But as Arora notes, this issue, even if real, is a long ways off to be worried about right now.
“The worry is a lot of money is starting to come in and the underwriting standards can come down,” Arora tells NerdWallet. “But we’re far away from that […] Small businesses have been credit starved for a long time.”
If you’re an Ohio entrepreneur looking for an affordable, long-term, fixed-rate SBA loan that can help expand your small business, partner with Growth Capital Corp. today!
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