Approval rates for small business loans from credit unions reached a record low in September, according to a report from Biz2Credit.
Credit unions’ approval rates dropped to 39.7%, down from 39.8%% in August and 40.3% in September 2018, according to the Biz2Credit Small Business Lending Index, which was released on Tuesday. That’s the lowest the figure has been since the company started analyzing business loan approvals in 2011.
“Other categories of lenders are all moving to digital applications. I would say that credit unions have lost their way in small business lending in today’s low interest rate environment,” Rohit Arora, CEO of Biz2Credit, said in a press release. “Certainly, the member business lending cap (12.25% of their assets) does not help. Meanwhile, banks and institutional lenders are more aggressive in small business lending.”
At the same time, approval rates at banks with at least $10 billion in assets rose to 27.9% in September, up a basis point from August and an increase from 26.7% a year earlier. That marks another post-recession high, according to the report.
Approvals at smaller banks remained flat at 50.3% from August to September. That is also 4 basis points higher from a year earlier, according to the report.
Institutional lenders approved small business loan applications at a rate of 65.9%, up from 65.8% in August and 64.5% in September 2018.
