Bank Lending to Small Businesses Rose in April

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Lending by banks to small businesses is on the rise.

Institutions with at least $10 billion of assets approved 16.8% of loans between $25,000 and $3 million in April, up from 15.7% in March and 10.6% a year earlier, according to an index published Friday by Biz2Credit, which connects small and midsize business borrowers with lenders.

The loan approval by small banks, which Biz2Credit defines as institutions with less than $10 billion of assets, rose to 50.9% in April, compared with 50.8% in March and 45.9% a year earlier.

"As the economy continues to rebound, lending conditions are gradually improving," Rohit Arora, Biz2Credit's chief executive, said in a press release. "Higher credit-quality customers are electing to apply to loans from big banks first now that they are more willing to lend and the service has improved."

The approval rate by community development financial institutions and other nonbank lenders fell two-tenths of a percentage point, to 63.4%, in April, from a month earlier.

The loan approval rate by credit unions fell to 45.2% in April, down from 45.5% in March and 57.4% a year earlier.

The Biz2Credit Small Business Lending Index reflects an analysis of roughly 1,000 loan applications each month on Biz2Credit.com.

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