The approval rate for small business financing at institutional lenders sustained their ongoing way up, based on Biz2Credit’s November Small Business Lending Index™, a research of more than 1,000 loan applications of eligible small business owners. While large banks and institutional lenders uphold their overall strong approval rates, the approval rates for small business financing at credit unions, alternative lenders and small banks flattered.

Institutional lenders sustained monthly development in November, getting 62.4%, up from October when it was 62.2%.

The institutional lenders are providing good financing terms to borrowers, and they’re realizing. Investors are buying more loans at lower rates and longer terms in addition to low administering risks. They’re getting very dynamic players in small business lending.

In November, large banks authorized almost 22.8% of small business loan applications, which measured up last month’s number. On the other hand, there’s sanguinity that small business lending by large banks will expand within the coming few months as Janet Yellen, Chairwoman of Federal Reserve recently suggested that the Fed would increase rates of interest soon.

A rise in interest rates would raise the motivation for large banks to authorize a greater number of loan requests,” Rohit Arora, CEO of Biz2Credit said. He added that, as the financial spreads on these loan requests improves, he expect more loans authorized with the institutional lenders. Greater profitability on loans can result in more loan approvals.

The approval rates at small banks in November fell down to 48.9%, although the previous figure was 49% in October. Additionally, for a full year, small banks have rejected over 50% of the loan requests. It’s also observed that more creditworthy borrowers going for loans at large banks. Small banks have experienced issues because of their failure to acclimatize to improvements in new technology and other parts of practices, therefore making it harder for small businesses to try to get business loans. However, the intimidating increase in interest rates ought to give small banks a chance to approve more loans.

The approval rates on loan from alternative lenders in November dropped from 60.8% to 60.7%. The approval rate percentages from alternative lenders have continuously turned down since January 2014, corresponding with the evolution within the small business lending market.

It is also observed that alternative lenders are not offering competitive terms on loans and this resulted in gradual drop in loan approvals from alternative lenders as well, despite the fact that they charge high interest rates.

The same is with credit unions. In November, they approved almost 42.4% of loan requests, down one-tenth of a percent compared to October.

Credit unions continue to be limited, simply due to the failure to amplify the credit union member business-lending cap from 12.25% of their assets to 27.5%.