When putting up a business, the owner considers numerous factors, including the business idea, market research, legal structure, business plan, financing and budgeting, and other considerations.

Some owners seek a business loan to cover the start-up costs of their business.

The majority of them apply for business loans from banks.

About 43% of owners applied for business loans from small banks in 2020.

Are you planning to start a business and consider a business loan?

This article will give you the latest business loan statistics and facts that can help you decide afterward.

Post Contents

1 Key Statistics
2 Top Business Loan Statistics in 2024
3 Conclusion
4 Sources

Key Statistics

The average business loan amount for Small Business Administration (SBA) is $417,316.
38% of small business owners get a business loan to expand, down by 20% from the prior year.
In December 2022, the average interest rate for business loans for the Euro area hit 3.41%.
The most common reason for business loans was to cover operating expenses.
In 2023, the forecasted business/corporate loan write-off in the United Kingdom is 0.8%
About 21% of small businesses sought business loans from $100,001 to $250,000 in 2020.
Almost three out of four small business owners in the United States are in debt.
Small businesses primarily apply for loans from banks, accounting for over 40%.

Top Business Loan Statistics in 2024

1. $417,315 is the Average Loan Amount for Small Business Administration (SBA)

Many small businesses apply for business loans to support their operations and cover their financial needs.

Some seek loans to expand their existing business or start a new business.

According to Zippia, the average business loan amount for Small Business Administration (SBA) is $417,316, while the maximum is up to $5 million.

In 2020, only 38% of small businesses applied for a business loan to expand, down from 58% from the prior year.

This shows the effect of the COVID-19 pandemic on small businesses.

They were uncertain about their capacity to expand during the crisis.

(Zippia)

2. The Average Interest Rate for Business Loans for the Euro Area in December 2022 Reached 3.41%

Similar to other types of loans, a business loan has interest rates and fees to be paid in addition to the principal amount.

It should be repaid on a specific schedule and period.

The loan term and interest rate impact the total amount of interest and cost of the loan.

Interest rates vary based on location and lender.

In December 2022, the average interest rate for business loans for the Euro area reached 3.41%.

While the highest interest rates in the area were in Latvia, with 4.96%, and Estonia, with 4.7%.

(Gitnux)

3. Covering Operating Expenses was the Most Common Reason For Applying for Business Loan in 2020, Accounting for 58%

Business owners apply for loans because they need funds to cover various expenses.

In 2020, the most common reason for business loans was to pay for operating expenses like rent and wages of employees, accounting for approximately 58% of business owners.

Here are the four most common reasons for applying for business loans in 2020:

58% of business owners applied for business loans to cover operating expenses
38% of business owners applied for business loans to expand or invest in a new opportunity
32% of business owners applied for business loans to pay a debt or refinance
22% of business owners applied for business loans to make repairs or replace capital assets

(Finder)

4. The Estimated Business/Corporate Loan Write-Off in the United Kingdom in 2023 is 0.8%, From 0.3% in 2018

In 2023, the expected amount of business/corporate loans in the United Kingdom is approximately 513 billion British pounds, up from 435 billion British pounds.

Based on Statista’s report, the share of business/corporate loan write-offs in the UK continuously rises from 2018 to 2023.

The estimated loan write-off in 2023 is 0.8%, increasing from 0.3% in 2018 and 2019.

Below are the estimated business/corporate loan write-off in the United Kingdom from 2018 to 2023:

In 2018 and 2019, the estimated business/corporate loan written-off in the UK was 0.3%
In 2020, the estimated business/corporate loan written-off in the UK was 0.5%
In 2021 and 2022, the estimated business/corporate loan written-off in the UK was 0.7%
In 2023, the estimated business/corporate loan write-off in the UK was 0.8%

(Statista)

5. In 2020, About 21% of Small Business Owners Sought Business Loan Amounting from $100,001 to $250,000

According to the Lending Tree data, small businesses had diverse funding needs in 2020, and the business loan amounts they sought differed based on specific requirements and financial circumstances.

About 21% of small business owners sought business loans amounting from $100,001 to $250,000 in 2020.

Around 15% preferred loans less than $25,000, while 9% preferred over $1 million.

(Lending Tree)

6. Approximately 70% of Small Business Owners in the United States Have Outstanding Debts

Based on Zippia’s latest report, nearly three out of four small business owners in the United States are in debt, equivalent to 70%.

Most of them have outstanding debts of less than $100,000.

Let’s take a look at the outstanding debt of small business owners in the US:

38% of small business owners in the US have outstanding debts of less than $100,000
26% of small business owners in the US have outstanding debts between $100,000 to $1,000,000
6% of small business owners in the US have outstanding debts of more than $1,000,000
30% of small business owners in the US have no outstanding debts

(Zippia)

7. Small Businesses Primarily Seek Business Loans from Banks, Accounting for Over 40%

Businesses can apply for business loans from various lenders like banks, credit unions, community development financial institutions, and online lenders.

However, small businesses primarily seek banks for business loans because banks are traditional lending institutions.

They also provide a level of familiarity.

In 2020, about 43% of small businesses applied for business loans at a small bank, while 42% applied at large banks.

Online lenders also received 20% of loan applications, credit unions with 9%, and CDFI with 3%.

(Finder)

Conclusion

Businesses apply for a business loan when they need funds to support their operation, expand their business, pay debts, or buy necessary equipment.

It is important to note that when business owners applied for business loans, they must repay the loan amount together with the interest over a specified schedule and period.

Different lenders may differ the interest rates.

That’s all about the latest business loan statistics.

You can now decide whether to apply for a business loan or not.