The market for small business credit has exploded since the Great Recession, with various nonbank lenders using innovative credit decision making, digital applications, and marketing practices to carve out a large market of business borrowers previously considered too expensive to underwrite. The threat for banks is that customers obtaining financing elsewhere not only threaten potential loan revenue but also the retention of the depository, merchant services, and payments side of the relationship. Banks that are able to solve the challenges and expand their business loan capabilities — whether it’s through product development or partnership — will reap the rewards of primary bank status: a higher share of deposits, card spending, and auxiliary product usage.

Key questions discussed in this report: 
  • How has the small business credit market evolved?
  • Where are business owners currently sourcing financing?
  • What is the level of awareness and usage of fintech and other nonbank lenders?
  • Where do small businesses apply for credit?
  • Why do business owners choose nonbank lenders over banks?
  • Which businesses should banks target with innovative lending products?
Companies Mentioned: Amazon, JPMorgan Chase, Kabbage, OnDeck, PayPal, Santander UK, Square, Wells Fargo


The small business data in this report are based on information collected in a random-sample panel of 1,000 small and micro businesses in a February 2017 online survey. Javelin defines microbusinesses as those with annual revenue between $100,000 and $1 million and small businesses as those with revenue between $1 million and $10 million.