Big Banks Are Back? Yeah Baby
If you want more proof we're in a recovery and that banks have stopped lurking under rocks when it comes to your request for financing, look no further than alternative lender Biz2Credit's most recent lending status report.
In May, big banks with assets of $10 billion or more approved 19.6 percent of requests for financing, an increase of 2.3 percentage points compared to May, 2013, and a record for the survey, which has been keeping track of approvals since January 2011.
Smaller banks also reached record territory, notching an approval rate of 51.6 percent, an increase of more than 2 percentage points compared to the same period a year earlier. And lending from institutional investors, which Biz2Credit only began tracking in January of 2014, topped 59 percent. That's an increase of more than 2.5 percentage points since January.
Not all institutions saw lending spike. Approvals from credit unions and alternative lenders, who often charge more than conventional lenders, are losing steam. Credit union approvals for May dropped about 1.4 percentage points to 43.6 percent, compared to a year earlier. Meanwhile, alternative lenders were flat at 63.3 percent.
“The results of this month’s index show that the economy continues to rebound," Rohit Arora, chief executive of Biz2Credit, said in a statement. "Small businesses are increasingly willing to find expansion capital and are now more likely to receive funding from banks, which typically offer lower interest rates than other lenders.”