Community Banks Down to 19% Share of Small Business Loans; Losing to Fintech/Big Banks

Randal Quarles, FED Board member, says in a recent article, that community banks have lost significant market share of small business loans. “Our data suggests that the growing share of small business loans by Fintechs and large banks may be due to their automated underwriting.”  And he reports that Fintech lenders “can underwrite with deposit or payroll data in real time.”  As a result, he notes that community banks have now only 19% of business loans under $100,000, which are two-thirds of all business loans.  He reports two decades ago, community banks had nearly 60% of the small business loans under $100,000.        

 But some like $1.4B First Northern Bank are winning in the new environment.  Their Lightning Loans get an application and loan offer in a minute leveraging deposit data in addition to owner/guarantor credit.  They are expanding to offer loans up to $150,000.

Don’t lose your community bank’s key market of small business loans.  Let us show you how our Business MinuteLender® technology can more efficiently and profitably deliver loans in minutes as no other provider can, all under your brand, your underwriting, and your control for loans on your balance sheet.  All on a smart device of computer, in-branch or out. It will drive new efficiencies of your existing loans and assure you continue to win in the new small business loan marketplace.