As banks and other competitors make their way back into the business lending marketplace, credit unions appear to be holding their own with an increase in loan approval rates.
New York, NY -- (SBWIRE) -- 12/09/2011 -- That’s according to Biz2Credit’s Small Business Lending Index, which analyzes information submitted by small business owners applying for financing through the firm’s online platform that connect borrowers with more than 450 lenders nationwide.
“The biggest story is the continued aggressiveness of credit unions small business lending,” said Rohit Arora, CEO of Biz2Credit, a New York-based firm.
Indeed, credit unions are going after the small business lending market, reporting a 57% loan approval rate in November, the index showed.
“They are also actively soliciting deposits at the expense of big banks in order to have the money for loan making,” the firm said.
Credit unions, community development financial institutions, micro lenders and others approved 62% of funding requests in November, a rise from 61.8% during October.
Biz2Credit said loan approvals by small banks increased to 47% in November, their highest rate this year, and an increase from 46.3% in October. Approvals by large banks also rose, reaching 10% for the first time since April.
Arora cited NAFCU data that reported credit unions upped loan making by 4.5% in the 12 months ending June 2011, and Biz2Credit has seen similar increases in subsequent months.
Still, banks with assets between $10 billion and $50 billion are starting to come back in the market, albeit cautiously, Arora pointed out.
“They are continuing to monitor the European financial crisis, as well as the debt battle in Congress. National and international issues impact big banks more than smaller lenders,” Arora said.
Biz2Credit's analysis also found that loan request amounts ranged from $25,000 to $3 million, that the average credit score was above 680, and that the average time in business was slightly more than two years.