Clicking for Credit: Experiences of Online Lender Applicants from the Small Business Credit Survey

Barbara J. Lipman, Lucas Misera, Ann Marie Wiersch and Kim Wilson

Community Development Publications from Federal Reserve Bank of Cleveland

Abstract: This report presents findings on the experiences of small businesses seeking credit from online lenders, based on data from the 2021 Small Business Credit Survey (SBCS). According to findings, firms that apply to online lenders are more likely to be newer and have fewer employees, lower revenues, and weaker credit scores. In addition, Black- and Hispanic-owned firms are more likely than white- and Asian-owned firms to report that they applied to an online lender. Furthermore, contrary to prior SBCS findings, online-lender applicants were less likely than bank applicants to be approved for the full amount of financing they sought. Generally, online-lender applicants reported lower overall satisfaction with their lenders than did bank applicants. Overall, approved applicants cited fewer challenges with their lender experiences than did applicants that were denied. The only exception was at online lenders, where approved applicants were more likely than denied applicants to cite challenges with high interest rates and unfavorable repayment terms.

Keywords: small business; lenders (search for similar items in EconPapers)
Pages: 17
Date: 2022-08-16
New Economics Papers: this item is included in nep-ban, nep-sbm and nep-sea
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.26509/frbc-cd-20220816 Full Text (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:c00034:94634

DOI: 10.26509/frbc-cd-20220816

Access Statistics for this paper

More papers in Community Development Publications from Federal Reserve Bank of Cleveland Contact information at EDIRC.
Bibliographic data for series maintained by Joanne O'Dell ().