A vibrant small business community depends on access to capital. But that access is also the greatest challenge small businesses face, threatening the very fabric of the American economy. We firmly believe that small business owners are sophisticated entrepreneurs who are the backbone of the American economy and we should empower them with as many tools as possible so they grow and create jobs.
Our Partners believe in the following core principles.
We support financial innovation. Policymakers and regulators must recognize that alterative finance innovation is still in the early stages of development. While it is important to monitor ongoing market developments, the government should avoid preemptive regulatory efforts that may stifle innovation as it is evolving and restrict small businesses ability to access to alternative finance. Emerging technology and the development of new platforms are allowing online lenders to reach underserved businesses and those that traditional finance will not or cannot serve.
We believe small businesses are unique and have different needs than a consumer. Unlike consumers seeking loans, small businesses seek access to capital to hire new workers or pursue growth opportunities—purchase inventory, upgrade or expand facilities, or develop new products and services. Small business borrowers have a wealth of data they can bring to bear, data that gives lenders a much better picture of business performance over time. Unlike consumer loans, most alternative finance products do not require collateral or personal recourse. Consumer loans tend to focus on debt consolidation or personal finance shortfalls. Most commercial credit decisions are educated by the business’ performance and loans are truly an investment in the eventual success of the business.
We demand transparency. We believe all small business lenders and platforms should disclose all terms in a clear and transparent way. We believe lenders should clearly disclose how the financing and repayment will work. We believe lenders should provide marketing materials that are accurate and understandable. We also believe small businesses should have direct access to customer service representatives that can provide detailed and accurate information about their account, the process, and the products offered by the financing provider.
We believe in responsible and fair financing. It is critical that lenders only provide financing to companies that can reasonable afford the financial product without putting undue strain on the business. We encourage a fair underwriting process that fully analyzes the ability to repay and requires the small business only to use the funds for businesses purposes. Our Partners will work with small businesses to only offer financing options that help put them in the best position to succeed.