As interest rates on SBA and traditional term loans continue to rise, non-bank lenders are becoming an increasingly attractive option for small businesses. Although the cost of capital offered by big banks is still slightly cheaper, shorter funding timelines and higher approval rates are driving more small businesses to consider funding from alternative lenders. A recent report from Biz2Credit indicated that the small business loan approval percentages of alternative lenders increased to 27.8% through the first month of 2023, nearly double the 14.4% reported for big banks. While approval rates at small banks rose to 21.4% in the same period, they remain below non-bank lenders. As the Federal Reserve continues to implement interest rate hikes to combat inflation, higher borrowing costs and stringent approval standards are expected to persist at big banks in the near future. Accordingly, alternative lenders may be an increasingly popular funding source for small businesses looking for quick and reliable financing, particularly those in working capital-intensive industries.