December 13, 2017
Fully 78% of small business owners believe that high-interest, high-fee loans currently being offered online should be subject to stronger regulations in order to protect their companies from financial products that could harm them.
Those results were documented by a poll released by Small Business Majority on December 12.
The survey, conducted by Greenberg Quinlan Rosner Research, found that 74% of small business owners think that, even though online lending has opened up new sources of capital, such lenders should be regulated to ensure small business borrowers are protected from predatory practices.
What’s more, 80% of small business owners favor regulating online lenders to ensure that interest rates and fees are clearly disclosed to borrowers.
“Small businesses consistently say obtaining more funds is one of their most pressing issues, and new or alternative online lending options have appeared in recent years to help meet this need,” said Small Business Majority CEO John Arensmeyer, adding, “Although the emergence of more lending choices is a positive development for entrepreneurs, the downside is these new forms of lending have outpaced existing protections, leaving small businesses vulnerable to a few bad actors.
“It’s crucial,” Arensmeyer said, “that small firms are able to access transparent, responsible lending options, and this can be accomplished through more oversight of the online lending industry.”
The poll also found one-third of small business owners surveyed sought capital or credit in the past 12 months. Of those small business owners who applied,but did not receive a loan, nearly one-half (47%) report that they were denied because of a low credit score; while one-third report that their application was denied for other reasons.
The poll was conducted among 500 small business owners nationwide.
Research contact: 202-828-8357 (Small Business Majority)