Big Banks Getting Back in the Business of Making Loans to Small Businesses in US?<\/p>\n
Here\u2019s good news for entrepreneurs: Big banks are becoming a tad more generous with\u00a0small-business loans.<\/p>\n
Major banks and institutional lenders have been approving small-business loans at higher rates, while the pace is holding steady at alternative lenders, according to\u00a0a report this week\u00a0from Biz2Credit, an online marketplace for small-business loans.<\/p>\n
At banks with more than $10 billion in assets and at institutional lenders \u2014 including credit funds, insurance companies and nonbank financial institutions \u2014 approval rates on small-business loan applications climbed in June, to their highest level since Biz2Credit began tracking them in 2011, the report says.<\/p>\n
On the other hand, approval rates at alternative lenders and credit unions were mostly flat. The report was based on an analysis of 1,000 loan applications on the Biz2Credit platform.<\/p>\n
\u201cWe\u2019ve come a long way,\u201d Biz2Credit Chief Executive Rohit Arora said in a statement. \u201cThese are the best numbers for big bank lending since the recession. \u2026 It is a good time for entrepreneurs in search of capital.\u201d<\/p>\n
This trend is significant because big banks and lenders pulled back from the small-business market during the financial crisis. Alternative lenders stepped in to fill the void in small-business financing, helping create a vibrant, growing market.<\/p>\n
That market has started to\u00a0draw the attention\u00a0of traditional banks, but Sam Hodges, founder of alternative lender Funding Circle, says big financing companies are, for the most part, still wary of lending to small businesses.<\/p>\n
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Molly Otter, chief investment officer at Lighter Capital, another alternative lender, says the Biz2Credit report paints an upbeat picture.<\/p>\n
\u201cBanks becoming more aggressive in their approvals \u2014 I think that is great for business owners. \u00a0The more options they have, \u00a0the better off their business is going to be, and banks are currently the cheapest form of debt there is.\u201d<\/p>\n
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Big Banks Getting Back in the Business of Making Loans to Small Businesses in US? Here\u2019s good news for entrepreneurs: Big banks are becoming a tad more generous with\u00a0small-business loans. Major banks and institutional lenders have been approving small-business loans … Continue reading