Online Lenders are Changing the Small Business Lending Market for the Better
While banks are still the leader in providing outside capital for small businesses, there have always been alternative forms of loan capital available, including credit unions, Community Development Financial Institutions (CDFIs), merchant cash advances, equipment leasing, and factoring products.
This segment of the market has always been small compared to the $700 billion in small business bank credit assets. But Forbes discovered that since the onset of the financial crisis, and particularly during the economic recovery, there has been significant growth in innovative, online alternative funding for small businesses.
There has been a 175% growth in the outstanding portfolio balance of online lenders each year, compared to a 3% decline in the traditional banking sector.
As they grow, t...