Bank Lending to Small Business Slips, Crowdfunding on the Rise

New York-based crowdfunding platform Kickstarter broke its previous record for the most any single project has raised in April with Pebble, a watch that synchs with your smartphone. So far (the funding round is not over yet), the watch has raised more than $9 million from over 61,000 backers. And while alternative funding appears to be on the rise, loan approval rates at banks across the nation have slipped, according to the most recent analysis from Biz2Credit, an online marketplace that matches small and medium sized businesses with lenders.

Banks with more than $10 billion in assets approved 10.6% of loans in April, down from the 10.9% approval rate in March, according to the report released today from New York-based Biz2Credit. That also marks a continuing decline from January and February of this year, when big banks approved 11.7% of small business loans.

Smaller banks, or those with less than $10 billion in assets -- recently the bright spot in an otherwise challenging lending market for small businesses -- approved 45.9% of loans last month, down from the 47.6% in March and February this year. Approval rates at credit unions also dipped slightly to 57.4% in April from 57.9% the previous month.

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