Banks and credit unions tend to offer the most affordable business financing — if your business can qualify. Only a fraction of small-business loan applications are approved, and this disparity is getting worse.

According to the Federal Reserve’s 2022 Small Business Credit Survey, approval rates from both small and large banks declined from 2019 to 2021. Among small-business owners who received at least some of the financing they sought, small banks approved 8% fewer applicants in 2021 compared to 2019, and large banks approved 15% fewer applicants within the same time frame.

However, many business owners still need capital to cover everyday expenses — especially as they continue to meet economic challenges such as supply chain disruptions and rising inflation.

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