{"id":8302,"date":"2019-07-18T18:04:12","date_gmt":"2019-07-18T15:04:12","guid":{"rendered":"https:\/\/www.become.co\/blog\/?p=8302"},"modified":"2019-11-06T16:43:00","modified_gmt":"2019-11-06T14:43:00","slug":"small-business-lending-statistics-2019","status":"publish","type":"post","link":"https:\/\/www.become.co\/blog\/small-business-lending-statistics-2019\/","title":{"rendered":"Business Lending Statistics 2019: How Hard Is it to Get Approved?"},"content":{"rendered":"\n

Across nearly all industries, business owners are well-aware of how difficult it can be to get a business loan. Fortunately, the odds have increasingly been shifting in favor of the small business loan borrower – in part thanks to financial technology. Here, we\u2019ll take a dive into the data that demonstrates the real challenges business owner face when applying for additional funding.<\/span><\/p>\n

 <\/p>\n

Getting a business loan in 2019<\/span><\/h2>\n

 <\/p>\n

It\u2019s no secret that small business owners face difficult odds when it comes to obtaining financing – particularly new business owners and startups. The hard time that small business owners have in getting approved for loans, regardless of what the additional money is meant for, has a real impact on their chances of survival (more on that below).<\/span><\/p>\n

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What\u2019s also important to point out is that there are differences in the business loan approval rates between traditional banks (both big and small) and alternative lenders. Whether it\u2019s through banks or online lenders, there remain obstacles that stand in the way of business owners (new or experienced) getting small business loan approvals. With all that said, even with recent <\/span>advancements made in financial technology<\/span><\/a>, small business lending statistics still highlight just how hard it is to get a business loan.<\/span><\/p>\n

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How hard is it to get a business loan?<\/span><\/h3>\n

If you\u2019ve ever wondered \u201chow hard is it to get a business loan?\u201d, you\u2019re not alone. The answer to that question can be interpreted in several ways.<\/span><\/p>\n

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Business loan statistics regarding approval rates vary depending on many factors, including the path by which business owners seek to obtain funding. Let\u2019s take a quick glance at the small business loan rejection rates according to where the business applied for funding:<\/span><\/p>\n

 <\/p>\n\n\n\n\n\n\n
\n

Type of Loan Provider<\/b><\/p>\n<\/td>\n

\n

*Approval Rates<\/b><\/p>\n<\/td>\n<\/tr>\n

\n

Big banks<\/span><\/p>\n<\/td>\n

\n

27.5%<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Small banks<\/span><\/p>\n<\/td>\n

\n

49.8%<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Alternative lenders (including online)<\/span><\/p>\n<\/td>\n

\n

57.2%<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

*Statistics are according to the 2019 <\/span><\/i>Biz2Credit Small Business Lending Index\u2122<\/span><\/i><\/a>.<\/span><\/i><\/span><\/p>\n

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Another angle that can be taken in order to answer \u201chow hard is it to get a business loan\u201d is according to the type of loan the business owner is seeking to obtain. Let\u2019s look at the loan approval rates by loan type:<\/span><\/p>\n

 <\/p>\n\n\n\n\n\n\n\n
\n

Type of Loan<\/b><\/p>\n<\/td>\n

\n

*Approval Rates<\/b><\/p>\n<\/td>\n<\/tr>\n

\n

Auto\/Equipment loan<\/span><\/p>\n<\/td>\n

\n

82%<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Merchant cash advance<\/span><\/p>\n<\/td>\n

\n

79%<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Line of credit<\/span><\/p>\n<\/td>\n

\n

69%<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

SBA loan<\/span><\/p>\n<\/td>\n

\n

54%<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

*Statistics are according to <\/span><\/i>Fed Small Business\u2019s 2019 Small Business Credit Survey<\/span><\/i><\/a>.<\/span><\/i><\/span><\/p>\n

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Some other interesting small business financing statistics that are worth noting include the differences in approval rates according to gender, ethnicity, geographic location, business age, and so on. Let\u2019s have a look at small business loan approvals according to demographics:<\/span><\/p>\n

 <\/p>\n\n\n\n\n\n\n\n\n\n\n\n
\n

Demographic Group<\/b><\/p>\n<\/td>\n

\n

*Approval Rates<\/b><\/p>\n<\/td>\n<\/tr>\n

\n

White-owned businesses<\/span><\/p>\n<\/td>\n

\n

49%<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Minority-owned businesses<\/span><\/p>\n<\/td>\n

\n

33%<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Male-owned businesses<\/span><\/p>\n<\/td>\n

\n

72%<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Female-owned businesses<\/span><\/p>\n<\/td>\n

\n

14%<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Existing businesses<\/span><\/p>\n<\/td>\n

\n

47%<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

New businesses<\/span><\/p>\n<\/td>\n

\n

12%<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Urban businesses<\/span><\/p>\n<\/td>\n

\n

85%<\/span><\/p>\n<\/td>\n<\/tr>\n

\n

Rural businesses<\/span><\/p>\n<\/td>\n

\n

15%<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

*Statistics are according to <\/span><\/i>2019 SBA Lending Statistics<\/span><\/i><\/a>.<\/span><\/i><\/span><\/p>\n

 <\/p>\n

Small business lending statistics: \u20188\u2019 stats you should know<\/span><\/h2>\n

 <\/p>\n

The top 5 small business loan statistics that you should know:<\/b><\/p>\n

    \n
  1. What percentage of small businesses seek additional financing?<\/span><\/li>\n
  2. How many businesses receive the full amount they applied for?<\/span><\/li>\n
  3. Where do most small business owners apply for loans?<\/span><\/li>\n
  4. Which business lending sectors are performing best?<\/span><\/li>\n
  5. How long do business owners wait to get funded after approval?<\/span><\/li>\n
  6. Where should business owners search for the fastest loans?<\/span><\/li>\n
  7. What do business owners say are their biggest obstacles to funding?<\/span><\/li>\n
  8. What types of small business loans are most popular?<\/span><\/li>\n<\/ol>\n

     <\/p>\n

    1. What percentage of small businesses seek additional financing?<\/span><\/h3>\n

    According to a <\/span>Federal Reserve survey<\/span><\/a>, <\/span>43%<\/b> of businesses applied for additional financing over the past 12 months.<\/span><\/p>\n

     <\/p>\n

    2. How many businesses receive the full amount they applied for?<\/span><\/h3>\n

    Of the 43% of businesses that have applied for funding in the past year, <\/span>approximately half<\/b> (20%) obtained the total amount of funding that they had applied for.<\/span><\/p>\n

     <\/p>\n

    3. Where do most small business owners apply for loans?<\/span><\/h3>\n

    Of the businesses that applied for a loan, line of credit, or cash advance:<\/span><\/p>\n