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bank-loans-approval-increasing

Now That PPP Loans Have Ended, What’s Next?

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Now That PPP Lending Has Ended, Biz2Credit Small Business Lending Index Finds May 2021 Loan Approval Rates Increase for Banks and Non-Bank Lenders

 

 

Small business loan approval percentages at big banks ($10 billion+ in assets) climbed slightly from 13.4% in April to 13.5% in May 2021, however, small banks’ approvals jumped higher from 18.2% in April, to 18.7% in May.

“Loan approvals by small banks rose 0.3% as banks start to assess the favorable economic conditions beginning to emerge as lockdowns ease and more and more people receive a COVID-19 vaccine,” said Biz2Credit CEO Rohit Arora, one of the nation’s leading experts in small business finance. “Pent-up demand from consumers is an attractive narrative for small business owners to use as part of their justification for applying for financing. Banks, especially smaller community and regional institutions, are taking notice of this trend as they begin to open up their lending operations to the post-pandemic reality.”

 

Next month’s lending figures will be significant now that the federal government’s Paycheck Protection Program (PPP) has completed its second round.

“Businesses that are still reeling from the economic impact of the pandemic will have to look for other sources of funding,” Arora explained. “Look for business loans — especially loans from online or digital providers — to see a jump in activity now that PPP is closed.”

 

Total nonfarm payroll employment rose by 559,000 in May, and the unemployment rate declined by 0.3 percentage point to 5.8 percent, the U.S. Bureau of Labor Statistics reported on Friday, June 4. Notable job gains occurred in leisure and hospitality, in public and private education, and in health care and social assistance. Many of these jobs are created by small businesses.

Credit unions edged up from a 20.3% approval rate in April, to 20.4% in May 2021. However, other non-bank lenders inched up slightly. Institutional lenders approved 23.6% of funding requests in May, up slightly from 23.5% in April.

Meanwhile alternative lenders approved 24.3% of funding applications in May 2021, up from 24.0% in April.

“Alternative lenders saw a significant increase in approval rates in May while at the same time handling an ever-larger number of loan requests, thanks to the shift towards online finance in the small business space,” Arora said. “With the conclusion of PPP, banks are focusing on forgiveness and may not be ready to ramp up small business lending that is not government-backed.”

“Borrowers will have to turn to non-bank sources of funding, including alternative lenders, institutional lenders and credit unions,” he added. “These lenders are all starting to respond to the demand, and many will see their approval rates rise as customers who used to get loans from a bank are now looking to alternative sources of financing.”

 

 

About Premier Business Lending

Founded in 2015, Premier Business Lending has arranged more than $3 billion in small business financing. The company is expanding its industry-leading expertise in funding medium to small business by opening additional loan offices across the country while hiring knowledgeable financial consultants. Visit premierbusinesslending.com or Facebook, and LinkedIn.

504 Relief Loans

504 Loan Program Helps Assists Nation’s Small Businesses with Record $1.28B Funding in September

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The Small Business Administration (SBA) 504 Loan Program completed its largest monthly funding of loans in the program’s 34-year history, including 1,462 loans for nearly $1.3 million more than double the previous record set in September 2012. Historic levels of 504 loan closings and funding’s were driven by record low interest rates and debt relief provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Additionally, small businesses continue to benefit from SBA’s April 2018 introduction of a 25-year maturity option for 504 loans which complemented the program’s 10- and 20-year terms. The 25-year term provides an affordable, fixed-rate option with an attractive term that increases the 504 loan program’s usefulness by lowering monthly payments and improving borrower cash flow – particularly critical, as small businesses continue economic recovery from the COVID crisis.

 

Premier Business Lending, a California Licensed Lender recently began offering SBA product 504 Loan Program and the 7A loan program in order to help current customers during these difficult times.

 

The 504 Loan Program is an SBA business loan program authorized under the Small Business Investment Act of 1958. The core mission of the 504 Loan Program is to provide long-term financing to small businesses for the purchase or improvement of land, buildings and major equipment, to facilitate the creation or retention of jobs and to support local economic development. 504 loans offer fixed rates for 10, 20 and 25 years and finance project costs of approximately $100,000 to $25,000,000. Under the 504 Loan Program, loans are made in conjunction with private sector lenders to small businesses by Certified Development Companies (CDCs), which are certified and regulated by the SBA to promote economic development within their community.

Small Business Loans COVID-19

Covid Updates For Small Business

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Nearly 66,000 businesses have folded since March 1, according to data from Yelp, which provides a platform for local businesses to advertise their services and has been tracking announcements of closings posted on its site. From June 15 to June 29, the most recent period for which data is available, businesses were closing permanently at a higher rate than in the previous three months, Yelp found. During the same period, permanent closures increased by 3 percent overall, accounting for roughly 14 percent of total closures since March.
Researchers at Harvard believe the rates of business closures are likely to be even higher. They estimated that nearly 110,000 small businesses across the country had decided to shut down permanently between early March and early May, based on data collected in weekly surveys by Alignable, a social media network for small-business owners.
The silver lining in this pandemic for small business that decide to stay in business are that lending institutions such as Premier Business Lending have opened up underwriting guidelines. This is important in order for businesses to obtain an approval for their company. Rates are teetering a bit in the commercial finance sector due to overall economic nervousness of banks wanting to see how the pandemic continues to affect the Country. Premier Business Lending has seen a hike in customers borrowing habits over the last 60 days. With our Small Business Loans, we’re able to provide financing for your company. Equipment financing in industries such as Transportation, Construction and Manufacturing has increased by 15% while applications received from the equipment vending partners has increased by 13%.
Small Business need help during this period of time and fortunately we can help.