The percentage of loans extended to small and medium sized businesses in the US is typically measured by the proportion of commercial and industrial loans under $1 million in any given month. Since 2009 that measure has dropped from being 34% of new lending to just 21%. In other words, banks are not only making more money on their loans, but they have also been able to increase profits at a time when interest rates remain low. On Deck, Biz2Credit, Kabbage has stepped in to fill the gap raising $12bn of investments last year, with one in five smaller firms stating that they had applied for funding via an on-line lender.
The percentage of loans extended to small and medium sized businesses in the US is typically measured by the proportion of commercial and industrial loans under $1 million in any given month. Since 2009 that measure has dropped from being 34% of new lending to just 21%. A new breed of primarily on-line lenders have stepped in to fill that gap, led by names such as Lending Club, On Deck, Biz2Credit, Kabbage has stepped in to fill the gap raising $12bn of investments last year, with one in five smaller firms stating that they had applied for funding via an on-line lender.