Big Banks' Small Business Loan Approval Rates Drop Below Nine Percent in June 2011

New York, NY (PressExposure) July 12, 2011 -- The Biz2Credit Small Business Lending Index, an analysis of 1,000 loan applications on Biz2Credit (www.biz2credit.com) during the month of June 2011 has found that approval rates for small business loan requests continue to drop at both large and small banks.

An analysis of 1,000 loan applications on Biz2Credit™ during June found that approval of small business loan at big banks (institutions with $10 billion+ in assets) dipped from 9.4% in May 2011 to 8.9% in June 2011. Loan-making at smaller banks also fell from 44% from May 2011 to 42.5 % in June 2011.

The Biz2Credit Small Business Lending Index also identified the Top 5 reasons why small business borrowers have not received funding:

1. More than 60% of small businesses reported that their revenues in first 6 months of 2011 fell by greater than 7% (as compared to last 6 months of 2010)

2. Profitability declined at more than 90% of small businesses over the past 2 years.

3. Banks are increasingly unwilling to approve loans for companies in business for less than 3 years

4. The expiry of SBA guarantees made loans more expensive

5. Avoidance: The perception among small business owners that they were unlikely to get loans and that the process takes too long.

"When more than half of small businesses report that their revenues in first 6 months of 2011 have fallen, it is a bad sign for the economic recovery. At the same time, lenders have set the bar higher and are denying loans to companies whose revenue growth has slowed." said Raj Tulshan, Director , Business Development, Biz2Credit, recently named "Top Entrepreneur of 2011" by Crain's New York Business and one of the country's top experts on small business finance.

The Biz2Credit Small Business Lending Index discovered that only 13% stated that their revenues have grown by 5% or more during the first six months of 2011, while 27% of potential small business borrowers said their sales have remained flat. The analysis also found that loan request amounts ranged from $25,000 to $3 million; that the average credit score was above 680, and that average-time-in-business was slightly over 2 years. 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.

"The fact that relatively few banks have received money from the Treasury's $30 billion Small Business Lending Fund is disappointing. Meanwhile, the Labor Department's jobs report discovered that only a paltry 18,000 new jobs were created in June. This data tell us that small businesses, which account for the majority of job creation in the economy, are still struggling," Arora added.

About the Biz2Credit Small Business Lending Index

The Biz2Credit Small Business Lending Index differs from other indices by analyzing required information (primary data) submitted by small business owners applying for financing through Biz2Credit's online platform, which connects borrowers with more than 400 lenders nationwide.

About Biz2Credit

Founded in 2007, Biz2Credit (www.biz2credit.com) connects small business owners with lenders and service providers to empower them to grow their enterprises. The company matches borrowers with financial institutions based on online profiles that can be completed in less than five minutes in a safe, efficient, price-transparent environment. Biz2Credit's network consists of 150,000 users, 400 lenders, credit rating agencies such as D&B and Equifax, and small business service providers including HP. Having secured nearly $400 million in funding for small businesses throughout the U.S. and currently processing 3,000+ loan applications monthly, Biz2Credit is widely recognized as the #1 credit resource for small businesses.

Press Release Source: http://PressExposure.com/PR/Biz2Credit.html

Press Release Submitted On: July 12, 2011 at 8:37 am
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