New York, NY (PressExposure) May 05, 2011 -- An analysis of 1,000 loan applications on Biz2Credit (http://www.biz2credit.com) during the past four months has found that approval rates for small business loan requests at smaller banks rose slightly from 43% in last quarter of 2010 to almost 45% in first quarter of 2011.
Meanwhile, small business lending by big banks (banks with $10 billion+ in assets) has fallen from 10.6% in the 4th quarter of 2010 to 9.8% in the 1st quarter of 2011.
The Top 5 reasons why small business borrowers have not received funding are:
1. More collateral was needed in order to grant a loan (even under existing SBA guarantees)
2. Small companies' falling revenue and profitability over the past two years
3. The bank would not approve loan to a company in business for less than three years
4. Loan-making decisions are taking too long
5. The perception among small business owners that they were unlikely to get loans.
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 Average Time in Business was just over 2 years.
"Large banks have publicly stated that they want to increase small business lending, but their actions don't match their words," added Arora, who believes that there is much puffery by large lenders who want to make bank regulators happy. "While the government encouragement via the Treasury Department's $30B Small Business Lending Fund and SBA lending programs has helped, it is by no means easy to secure capital at this point in time."