Biz2Credit: https://www.biz2credit.com/ Related Resource: https://www.biz2credit.com/small-business-lending-index/january-2016 This is the second time in six months when big banks decreased 22.7% of small business loan requests in January 2016, down from 22.9% in December 2015. A year-to-year comparison shows that lending approval rates are up 6.5%. For further queries, contact us at: 800-200-5678 Follow us at: Twitter: https://twitter.com/biz2credit Facebook: https://www.facebook.com/biz2credit Linkedin: https://www.linkedin.com/company/265111 Pinterest: http://www.pinterest.com/biz2credit/ Google+: https://plus.google.com/u/0/+Biz2credit/

1. 62.6%62.5%
Stock Market Volatility Leads to
Drop in Loan Approvals at Banks, Credit Unions
Institutional Lenders and Alternative Lenders Capitalize on Slow Month for Mainstream Financial Institutions
January 2016Small Business Lending Index
According to the Biz2Credit Small Business Lending IndexTM
, a monthly analysis of 1,000 loan applications on Biz2Credit.com
Loan approval rates at both big banks and small banks dropped in January 2016, according to the Biz2Credit Small Business Lending Index™, the monthly
analysis of more than 1,000 small business loan applications on Biz2Credit.com. Additionally, loan approval percentages at credit unions fell to an all-time
Index low. Meanwhile, institutional lenders and alternative lenders experienced an uptick in loan approval rates.
About the Biz2Credit Small Business Lending IndexTM
Biz2Credit analyzed loan requests ranging from $25,000 to $3 million from companies in business more than two years with an average credit score above 680.
Unlike other surveys, the results are based on primary data submitted by more than 1,000 small business owners who applied for funding on Biz2Credit's online
lending platform, which connects business borrowers and lenders.
TM
Loan Approvals at Small banks
Lending approval rates at small banks dropped slightly to 49% in January, from 49.1% in December.
"Institutional lenders are doing a great job at minimizing the risks of borrowing requests through advanced algorithms,” said
Arora. “In recent months, we are seeing more international funds enter the game seeking higher yields from investments. With
growing uncertainty in global emerging markets, I expect this to remain a popular commodity for both investors and
borrowers.” - Biz2Credit CEO Rohit Arora
“
"The turbulence in the stock market and plummeting oil prices in the last month have resulted in a level of uncertainty for
lenders, While the demand for small business loans held up, the approval standards tightened.” - Biz2Credit CEO Rohit Arora
“
Loan Approvals at Institutional Lenders
Lending approval rates at institutional lenders experienced a slight uptick in January, improving 62.6% from 62.5% in
December. Since introduced as a category of lenders to the Index in 2014, institutional lenders have yet to experience a
setback month.
Loan Approvals at Big banks
For the second time in six months, lending approval rates at big banks ($10 billion+ in assets) declined as they approved
22.7% of funding requests in January, down two-tenths of a percent from December 2015. However, a year-to-year
comparison shows that lending approval rates are up 6.5%.
yearly comparison
22.7%21.3%
MONTHLY comparison
22.7%22.8%
yearly comparison
49.0%
49.6%
MONTHLY comparison
49.0%49.1%
yearly comparison
62.6%60.50%
MONTHLY comparison
Jan’16Dec’15
Credit union approvals
Credit unions approved 42.2% of loan applications in January – an all-time Index low – down from 42.3% the month prior.
yearly comparison
42.2%
43.2%
MONTHLY comparison
42.2%42.3%
Jan’15 Jan’16
Small business loan approvals by Alternative lenders
Loan approval rates at alternative lenders remained improved in January to 60.8%, up one-tenth of a percent from a previous
all-time low. Alternative lenders' approval percentages have steadily declined since January 2014, coinciding with the emergence
of institutional lenders in the small business lending marketplace.
yearly comparison
60.8%
61.6%
MONTHLY comparison
“While lending approvals dropped at the mainstream lenders, alternative lenders picked up the slack, Alternative lenders
typically offer more expensive loan products, so they are often one of the last choices for borrowers.”
- Biz2Credit CEO Rohit Arora“
60.8%60.7%
“Outside economic factors attributed to the drop in loan approvals at big banks last month, When there is uncertainty in the
market, mainstream lending institutions are less inclined to take risks on loans.”- Biz2Credit CEO Rohit Arora
“
"Small banks have been slow to adapt to technological innovations to streamline the loan application process, so they are
receiving requests from lesser-quality borrowers. This is hindering them from approving more loans.”
- Biz2Credit CEO Rohit Arora“
"Credit unions are faltering because of their inability to adapt to technological advancements in the industry, Borrowers seek
speed and convenience; many credit unions are lacking in the digital department. This has resulted in a decrease in applications
from credit-worthy borrowers.” - Biz2Credit CEO Rohit Arora“
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Jan’16Dec’15Jan’15 Jan’16
Jan’16Dec’15Jan’15 Jan’16
Jan’16Dec’15Jan’15 Jan’16