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The Changing Small
Business Landscape
August 2013
OVERVIEW
The small business landscape is changing not only as a result of recent economic cycles but also as a
result of changing operating environment costs. Small business lending – coming out of the recession –
has lagged compared with other loan markets. Credit growth, which is correlated with economic growth,
has rebounded for consumer lending, excluding home finance. Large scale commercial and industrial
lending has rebounded for larger businesses, even including higher risks. The economic recovery, fouryears out, has been slower and incremental in momentum. The nature of the 2007 to 2009 recession
impacted both the supply and demand of credit, creating pent-up demand. As pent-up demand opens
in 2013 and remains sustainable, the small business lending market should benefit.
Additionally, the dynamics of small business operating costs are changing due to regulatory impacts, tax
policy changes and impending healthcare reform implementation1, all still in flux. Many small businesses
are directly affected by these regulations and laws, with some aspects still evolving, creating potentially
higher costs, new operating challenges given the new costs and increased uncertainty. Financial
institution regulation, which has also increased post-recession, additionally impacts small businesses as
lenders have changed the way small business loan products are supplied to the markets. Last and most
important, new lending models are emerging in the marketplace, relying on new information for decisions
on small businesses and creating new loan products.
1
The employer healthcare mandate requirement has been deferred from 2014 to 2015 as of July 2013.
THE CHANGING SMALL BUSINESS LANDSCAPE
2
Considering recent macro events, the changing small business landscape can be summarized:
• Small business lending contraction was driven by both commercial and consumer impacts
given the sizable real estate price deflation, among other factors. The housing collapse was
one of the triggers for an unprecedented financial system crisis which reversed pervasive easy
credit. Not only was the supply of credit impacted by the crisis but also the demand for credit.
• Increasing commercial lending overall, early housing recovery signals and demand momentum
should funnel to small business lending. The lag in small business lending slowed late 2012,
an early sign that the small business lending market may be at an inflection point.
• Small business lending portfolio quality has generally improved as lenders have rebalanced risk
which will also support small business lending. However, post-recession, the changing regulatory
environment for lenders is shaping small business loan product offerings, emphasizing cautious
risk taking with defined loan terms.
• Some shifting of small business lending to larger financial institutions may continue due to recent
regulatory changes. Increased regulatory costs may lead to additional lender consolidation
which could change the dynamics of small business lending segments which don’t easily fit
into standardized decision formats. Smaller financial institutions such as community banks will
continue to play a role in these small business lending segments, but more recent web-based
lending is innovating through alternative lending decision frameworks.
• These emerging alternative decision frameworks are modernizing small business lending
by leveraging finance, alternative data, analytics and technology. The frameworks integrate
high frequency, high volume transaction data into new risk segmentation analytics in order to
expedite small business loan decisions. Although a smaller part of small business lending today,
these alternative frameworks remove some of the market friction present in the small business
loan market.
• Small business operating costs are under pressure and in flux given recent regulatory and
legislative changes. Additionally, small business formation has lagged in the recovery and
remains below pre-recession levels. U.S. demographics, specifically Boomer demographics,
will likely shape small business formation levels.
THE CHANGING SMALL BUSINESS LANDSCAPE
3
Recent Economic Cycles Impact Small Business
The number of small businesses, according to the U.S. Census, has remained flat in recent years. The
number of firms from 2007 to 2010 approximated 27.7 and 27.8 million firms respectively, based
upon sole proprietorships and firms with less than 500 employees. The recent recession slowed
small business formation and increased small business shuttering, according to the Bureau of Labor
Statistics, resulting in little change in the number of small businesses. Furthermore, small business
formations or “births” lags pre-recession levels.
Prior to the recession and recovery, now in its fourth year, small business lending, which includes credit
cards, lines of credit, term loans and trade credit, was more abundant. In addition to business-specific
financing, small business owners could access personal capital or wealth with rising home owner’s equity
in a rapidly expanding housing market that grew to excess liquidity being injected into the market. Small
business owners accessed rising equity via cash-out refinancing or home equity lines as an example.
The nature of the recession can be described as prolonged due to the need to unwind much of the
effects of debt in a market that had lost its appetite for debt-based lending in the housing market. The
recession was marked by requisite growth declines, unemployment increases and more prudent credit
allocation (tighter underwriting and loan portfolio management).
However, the recession had several unique features which resulted in more pervasive impacts to the
downturn. Home price declines were one of the primary triggers to an incipient series of events that
underscored a global financial crisis in late 2008. With the housing price collapse and domino series
of adverse events thereafter, pervasive debt deleveraging has occurred. Deleveraging was not only a
function of increased credit losses or write-offs but also accelerated pay downs or payoffs as a form of
risk management/self-preservation. The market structure changed overnight from shifting risk in the
market to dealing with highly leveraged debt structures and reducing these debt structures by paying
down principal. This behavior not only affected the mortgage market, but also affected small business
owners. Preservation of capital and deleveraging has become the focus.
The impact on the small business landscape has been little change in the total number of small
businesses coincident with the recession. Lagging in the recovery, small business formation levels are
lower today than pre-recession levels. The question remains whether this is a systemic change or not.
Smaller business startups often find alternative ways to fund themselves, such as through personal/
family finances, cards and/or outside investor funding. Personal wealth – stocks, home equity and
THE CHANGING SMALL BUSINESS LANDSCAPE
4
savings – have recently made headway in recovering the approximately $16 trillion2 in wealth lost
during the recession, noting the stock market and home price increases in the first half of 2013.
Contraction in home equity and business equity, components of personal wealth relevant to small
business in particular, highlight the capital stresses on small business. Home equity peaked at $13.4
trillion (2006) decreasing to $6.3 trillion (2009), recently increasing to $9.1 trillion (2013). Business
equity3 peaked at $9.5 trillion (2007) decreasing to $6.5 trillion (2009) and presently approaches
$8.2 trillion (2013). Increasing personal wealth will support small business formation but still may not
achieve former levels. Startups externally funded by third party investors are likely faring better and
include some of the science, technology and information business sectors.
• Per the U.S. Census, from 2008 through 2010, the number of small business employer firms,
defined by firms with less than 500 employees, declined by more than 314,000 or 5.3 percent
compared to 2007. The latest data available, 2010, suggests the small business employer
firm attrition has slowed. For the number of sole proprietorships, the U.S. Census highlights
a decline by approximately 357,000 or 1.6 percent from 2007 to 2008 and post-recession
increases of about half of pre-recession levels (averaging approximately 380,000 from 2009 to
2011). The overall trend reflects the degree of leverage that preceded the great debt purge with
fewer small business firms or shifts from small business employer firms to sole proprietorships.
Shaded regions in all graphs indicate U.S. recession.
ANNUAL CHANGE IN # SMALL BUSINESS EMPLOYER FIRMS <500 EMPLOYEES
150,000
100,000
50,000
0
-50,000
-100,000
-150,000
-200,000
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Source: U.S. Census
2
Source: Federal Reserve Balance Sheets of Households.
3
Non-financial non-corporate business also commonly known as sole proprietorships and limited partnerships.
THE CHANGING SMALL BUSINESS LANDSCAPE
5
• The recent trend in the number of small businesses stems from fewer new businesses along
with increases in businesses shuttering. The Bureau of Labor Statistics provides a proxy
for small business formation and shuttering. Establishment births (formation) decreased
while establishment deaths (shuttering) increased resulting in rank order changes where
establishment deaths exceeded establishment births from 2008 to 2010. The Bureau of Labor
Statistics defines births and deaths by employment status. Specifically, births are defined
by positive employment in the most recent quarter and the absence of employment in prior
quarters; deaths, the converse, as the absence of employment in the most recent quarter and
positive employment in prior quarters.
• The trend has reverted to pre-recession rank order but not pre-recession business formation
levels. Bureau of Labor Statistics establishment births average 192,300 for 2012, 11% lower
than the 2005 pre-recession 216,800 average.4 Bureau of Labor Statistics establishment
deaths for 2011 average 188,000 or 2% higher than the 2005 pre-recession 184,300 average.5
PRIVATE ESTABLISHMENT BIRTHS & DEATHS 3-MONTHS ENDED/THOUSANDS
250
230
210
190
170
150
2002
Births
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Deaths
Births thru Dec 2012; Deaths thru Mar 2012
Source: Bureau of Labor Satistics
4
A reasonable benchmark as births increased in subsequent years: 2006 avg = 218.0K; 2007 avg = 211.0K
5
A reasonable benchmark with additional comparative references as: 2006 avg = 191.0K; 2007 avg = 201.0K
THE CHANGING SMALL BUSINESS LANDSCAPE
6
Small Business Lending
Small business lending is lagging other sectors of the economy currently, but continued and sustained
improvements in fundamentals, notably pent-up demand, should increase small business loan
demand. Other factors supporting small business lending growth are portfolio quality improvements
(lender driven) and household wealth including home price increases (small business driven). However,
small businesses – and small business lenders – are presently adjusting to regulatory and legislative
changes that are changing the dynamics of operation fundamentals. These changes have come to
the forefront today as top concerns for small businesses, even above the slower economic recovery.
As of March 2013, small business lending is lagging contrary to other sectors per Federal Reserve
Call Report data6. Small business loan balances, as represented by origination loan amounts less
than $1 million, have declined 17.9% from the 2008 peak. In contrast, large business loan balances,
as represented by origination loan amounts $1 million or greater, have increased by 12.4%. Small
business loan balance declines, however, slowed late 2012 and may be moving to an inflection point.
COMMERCIAL LOAN BALANCES LONG TERM TRENDS
$2,000
$750
$1,800
$700
$1,600
$1,400
$650
$1,200
$600
$1,000
$800
$550
2005
2006
Loans greater than $1MM
Balances in $Billions
2007
2008
2009
2010
2011
2012
Loans $1MM or less (RHS)
Source: Federal Reserve June Call Reports
Comparisons are made with Federal Reserve Call Report data sourced from the FDIC Statistics on Depository Institutions. Call
Report data available on a quarterly basis starting 2010 and June prior to 2010. Comparisons include commercial real estate.
6
THE CHANGING SMALL BUSINESS LANDSCAPE
7
COMMERCIAL LOAN BALANCES RECENT TRENDS
$2,100
$680
$2,000
$660
$1,900
$640
$1,800
$620
$1,700
$600
$1,600
$580
$1,500
$560
2010
Loans greater than $1MM
Balances in $Billions
2011
2012
2013
Loans $1MM or less (RHS)
Source: Federal Reserve Quarterly Call Reports
Excluding commercial real estate balances from Federal Reserve Call Report data, small business
loan balances declined 15.2 percent from the 2008 peak. Recent data highlights small business
loan trends by origination loan amount, including microloans or origination loan amounts less than
$100,000. Recent trends highlight balance contraction reversed in 2012 for small business origination
loan amounts greater than $100,000; and balance contraction reversed in 2013 for small business
microloans, or origination loan amounts less than $100,000. Overall, small business loan balances
increased 2.2 percent March 2013 year-over-year. This pivot point for small business loans is almost
four-years into the recovery.
Microloans, or origination loan amounts less than $100,000, from Federal Reserve Call Report data
notably experienced accelerated growth pre-recession which parallels the housing market expansion.
Between 2005 and 2008, microloan balances increased 30.8 percent compared to 2002 to 2005, when
microloan balances increased 2.3 percent. The compound annual growth rate for the post-2005 period
is 9 percent, higher than the pre-2005 multi-year growth benchmark altogether. The rapid post-2008
reversal in micro-lending would have more adverse impacts on small businesses due to their profiles:
smaller firm size and newer firms. Lending in these segments is typically more fragile and less fluid. THE CHANGING SMALL BUSINESS LANDSCAPE
8
SMALL BUSINESS LOAN BALANCE PERCENTAGE SHIFTS
Excludes Commercial Real Estate
LAST 2 QUARTERS
PEAK*
PEAK*
YOY
YOY
2005 - Peak
Peak - 2013
2011-2012/12
2012-2013/3
Less than $100,000
30.8%
(13.3%)
(0.1)
2.3%
$100,000 to $250,000
5.5%
(18.6%)
0.2
2.2%
$250,000 to $1 million
11.7%
(16.2%)
0.9
2.1%
Commercial Loans < $1 MM
17.5%
(15.2%)
0.4
2.2%
Commercial Loans < $1 MM
* Small Business Loans by Loan Amount, Peak Comparisons vary: LT $100,000, 2008/06; $100,000+, 2007/06
Source: Federal Reserve Call Reports
COMMERCIAL & INDUSTRIAL LOAN BALANCES LONG TERM TRENDS
$145
$140
$135
$130
$125
$120
$115
$110
$105
$100
$60
$55
$50
$45
$40
2005
$100,000 or less
2006
2007
2008
2009
$100,000 to $250,000 (RHS)
Excludes Commercial Real Estate, Balances in $Billions
2010
2011
2012
$250,000 to $1MM
Source: Federal Reserve June Call Reports
THE CHANGING SMALL BUSINESS LANDSCAPE
9
COMMERCIAL & INDUSTRIAL LOAN BALANCES RECENT TRENDS
$140
$53
$52
$51
$50
$49
$48
$47
$46
$45
$135
$130
$125
$120
$115
$110
2010
$100,000 or less
2011
$100,000 to $250,000 (RHS)
Excludes Commercial Real Estate, Balances in $Billions
2012
2013
$250,000 to $1MM
Source: FDIC/Quarterly Call Reports
The state of small business lending is relevant because of the significant role small businesses play
in the U.S. economy. Small businesses are the largest employer in aggregate in the U.S. According
to the Census7 firms with 500 or fewer employers account for 99.9% of U.S. businesses. A small
business credit recovery directly adds momentum to the U.S. recovery. Simply, economic growth and
credit growth are intertwined.
With the recession, small business lenders tightened credit; the Federal Reserve Senior Loan Officer
Opinion Survey highlights that 80% of lenders tightened credit in 2008. Lender easing returned to prerecession level ranges more or less starting in 2010. Lender easing is also synonymous with improving
small business loan portfolio quality due to recessionary tighter underwriting and account management
portfolio risk controls. Delinquency and write-off payment performance today generally approximate
lower pre-recession levels.
http://www.census.gov/econ/susb/
http://www.census.gov/econ/nonemployer/index.html
7
THE CHANGING SMALL BUSINESS LANDSCAPE
10
SMALL FIRM/ANNUAL SALES < $50MM TIGHTENING & DEMAND
80
60
40
20
0
-20
-40
-60
-80
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Tightening
Demand
Increased Tightening, Increased Demand > 0
Source: Federal Reserve Senior Loan Officer Opinion Survey
Small business credit demand has lagged during the recovery, but returned in 2012. Small business
credit demand momentum suggests improvements in the general economy with supporting industry
sector improvements almost across the board. Generally, industry sectors are off recession lows and
the majority of sectors show improvements in the last year, including construction which has lagged
during the recovery.
Bureau of Economic Analysis industry GDP highlights both manufacturing and service-related industries
with above average growth for 2012: durable goods manufacturing, information and wholesale trade are
among the top ranking growth industries. U.S. manufacturing trends reflect technological innovations,
lower U.S. energy costs and narrowing global wage differentials.8 U.S. information trends reflect
technological and analytical advancements coupled with new alternate data sources. U.S. construction
turned the corner in 2012 with 3 percent growth after six years of contraction.
Industry performance, benchmarked to pre-recession 2005, highlights that the majority of industries
are at or above 2005 levels with the exception of agriculture, forestry, fishing and hunting, construction
and other industries.
Global manufacturing cost trends are discussed in Boston Consulting Group, Sirkin, Howard L., Zinser, Michael and Hohner,
Douglas, “Made in America, Again”, August 2011
8
THE CHANGING SMALL BUSINESS LANDSCAPE
11
GDP BY SELECT INDUSTRY GROUP: VALUE ADDED CHAINED 2005 DOLLARS AS %YOY
US 2012 GDP: 2.2%, Private Sector 2012 GDP: 2.9%
%YOY CHANGE
Industry
Durable Goods/Manufacturing
Information
Wholesale Trade
2008-2009
2009-2010
2010-2011
2011-2012
(16.3%)
(5.5%)
(13.4%)
13.3%
3.2%
3.4%
6.8%
5.9%
3.0%
9.1%
5.8%
4.8%
(1.9%)
7.0%
0.2%
3.8%
Finance and Insurance/Finance, Insurance, Real Estate, Rental
Management of Companies & Enterprises/Professional & Business
25.2%
8.5%
0.2%
(9.2%)
(2.2%)
(4.8%)
0.0%
(0.6%)
(0.5%)
3.7%
3.6%
3.6%
Arts, Entertainment, Recreation, Accommodation, Food Service
Construction
(6.2%)
(12.9%)
6.4%
(1.2%)
5.4%
(0.3%)
3.5%
3.2%
Nondurable Goods/Manufacturing
(0.4%)
0.4%
(2.1%)
3.0%
Retail Trade
Mining
Source: Bureau of Economic Analysis
GDP by Select Industries Indexed to 2005
Industries with 2012 Indices at or above 2005
GDP BY SELECT INDUSTRY
140
130
120
110
100
90
2005
Mining
2006
2007
Information
Professional and business services
Value Added Chained (2005=100)
2008
2009
2010
2011
2012
Educational services, health care, and social assistance
Utilities
Source: Bureau of Economic Analysis
THE CHANGING SMALL BUSINESS LANDSCAPE
12
GDP BY SELECT INDUSTRY
140
130
120
110
100
90
2005
2006
2007
2008
Finance, Insurance, real state, rental, and leasing
Retail trade
Wholesale trade
2009
2010
2011
Transportation and warehousing
2012
Manufacturing
Arts, entertainment, recreation, accommodation, and food services
Value Added Chained (2005=100)
Source: Bureau of Economic Analysis
GDP by Select Industries Indexed to 2005
Industries with 2012 Indices below 2005
GDP BY SELECT INDUSTRIES
120
110
100
90
80
70
2005
2006
2007
Other services, except government
Value Added Chained (2005=100)
2008
2009
2010
2011
Agriculture, forestry, fishing, and hunting
2012
Construction
Source: Bureau of Economic Analysis
THE CHANGING SMALL BUSINESS LANDSCAPE
13
U.S. HOME PRICES & HOME OWNER EQUITY
$14
$12
$150
$10
$8
$100
Home Owners Equity
Home Prices
$200
$6
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Home Prices, Jan 2000=100
Home Equity, $MIL, NSA
Source: Case-Shiller, Federal Reserve/MEDC
In addition to recovering small business lending, small businesses and their owners will also benefit
from rising real estate values which returned in 2012 after six successive years of home price declines.
Home price appreciation benefits are many, but improving household wealth is linked to small business
capital. Small business formation is often a function of personal or family wealth and savings, home
equity and card financing. Existing small businesses tap home equity to expand or invest in their
businesses to varying degrees. Rising real estate values will offer another source of financing for small
businesses with improving household wealth. In fact, 2012 home equity line originations, albeit prime
risk, increased by more than 6% to 870,000 from the prior year, the first annual increase in five years9.
Small Business Lenders
Lending roles that shifted during the recession will likely continue with larger financial institutions
originating small business loans. Recent regulatory changes, notably the Dodd Frank Financial
Regulatory Reform Act (2010), may accelerate banking consolidation, notably community bank
consolidation, with fewer independent but larger asset size financial institutions in the U.S. Small
business lending also includes alternative lenders and the newer entrants tend to be online financing
platforms with alternative risk decision and payment frameworks.
9
Source: Equifax Consumer Origination Credit Trends
THE CHANGING SMALL BUSINESS LANDSCAPE
14
Lender composition has changed due to the recession as well as secular trends. An increase in
troubled financial institutions during the recession led to many closures, primarily smaller banks. The
number of financial institutions as available from the FDIC continues to decline [8,900 lenders in 2005
compared with 7,200 lenders in 2012] and Dodd Frank regulatory scope, including CFPB rulemaking,
may accelerate this trend making it more cost effective for smaller financial institutions to combine.
During the recession, small business lending by larger financial institutions, with assets of $50 billion
or more, increased. Although the share has tapered off, it is likely that larger financial institutions will
play an increased role in small business lending.
The recession also resulted in some increased small business lending by credit unions. The number of
credit unions increased small business lending even though this is a relatively small portion of small
business lending. Credit union business lending is constrained by lending caps.
Alternative lenders offer financing outside of traditional sources and several new entrants have
emerged as a result of the recession along with the continued evolution of technology and internet.
These alternative lenders, often online financing platforms, make decisions using types of “Big Data”
such as purchase transactions, shipping transactions and social media data along with traditional
data such as risk scores. Loans are typically short term in tenor and sometimes made against
receivables or inventory. Payments may be made daily from card remittances or bank accounts.
SMALL BUSINESS LENDER COMPOSITION
40%
9,000
8,750
8,500
8,250
8,000
7,750
7,500
7,250
7,000
38%
36%
34%
32%
30%
2005
2006
%Loans, $50+ B Asset Size
2007
2008
2009
2010
2011
2012
#Reporting Lenders
Source: FDIC
THE CHANGING SMALL BUSINESS LANDSCAPE
15
The Business of Small Business
Ongoing as well as impending regulatory and legal costs are currently a preeminent concern for
small businesses. Uncertainty of both the costs as well as the requirements adds an additional risk
factor. Specifically, small business polling10 suggests these types of business costs are of higher
concern than even the economy.
Tax code complexity and levels are of concern for small businesses. Complexity increases compliance
costs. Complexity has multiple facets including not only the tax code itself but also the continuous
tax code changes. The increased uncertainty for small businesses inhibits basic business planning.
The Affordable Care Act passed in March 2010 requires small businesses with a threshold of 50 full time
employees who work at least 30 weekly hours to offer health care coverage. Employer health care coverage
was originally required in 2014 with this year’s “numbers” determining the requirement status, but the
employer mandate has now been delayed until 2015 [as of July 2013]. De facto, large businesses offer
health care coverage, but less so for small businesses. A 2012 Kaiser/HRT Survey of employer sponsored
health benefits found that 61% of small businesses, defined by 3-199 workers, offered health benefits.
The new dynamics of health care coverage will present new costs for some small businesses and
the complex mechanics of the law increase uncertainty. For small businesses that will be required
to provide coverage, the polarity of the decision will be to offer and pay for coverage or pay the
offsetting penalty. In between, small businesses have operational decisions because of the added
costs, from managing staff levels or hours, outsourcing or increasing prices, to name a few.
Small Business Formation and Boomers
U.S. Baby Boomers (1945-1964) account for 25 percent of the U.S. population or about 76 million
Boomers according to the U.S. Census (with approximately 43.4 million between 50 and 59 years
of age). This demographic segment has – and will continue to have – a sizable influence by its
sheer numbers. Boomers may shape small business formation levels based upon both financial and
cultural influences. Many Boomers, as a near-retirement demographic, lost value in investments
during the recession and will have to extend working years. Cultural sentiment may also influence
extended Boomer working years as well. Boomers may be a growth engine for small business
formation going forward and shape formation levels to their pre-recession levels or better.
More than one poll highlighted healthcare and tax concerns, examples:
http://www.gallup.com/poll/160100/healthcare-costs-taxes-worry-small-businesses.aspx
http://online.wsj.com/article/SB10001424127887323789704578445232898182630.html
10
THE CHANGING SMALL BUSINESS LANDSCAPE
16
Summary: The Near Future of Small Business
• Many small businesses that have survived the recession are in a strong position to grow with
the economy and adapt to forthcoming regulatory and legislative changes. The regulatory and
legislative environment will shape small business context going forward, notably due to health
insurance employment thresholds.
• Small business formation will be shaped by the aging Boomer segment who will continue to
work in retirement years with many starting small businesses. Many Boomers with professional
backgrounds/careers will fluidly transition to small businesses.
• Small businesses will become smarter about their operating environment and cultivate the
tools needed to attain this knowledge. Small businesses will understand their networks and
dependencies: suppliers, lenders, investors, competitors, customers and markets. New tools
will arise to offer small businesses systematic, real-time 360 views to assess and decision on
these interdependencies to the benefit of their operations.
• Small business lending will turn the corner in 2013 as the U.S. economy continues to improve.
Lending will continue to open incrementally to higher risk segments.
• Small business lending by both traditional and non-traditional lenders will generate a new
set of credit risk tools that will decision (and approve) a wider swath of small businesses
compared with today’s risk tools. Small business lending tools will increase standardization
and transparency which will in turn support additional small business growth opportunities,
notably startups, for this vital U.S. sector.
• Non-traditional lenders have begun this process by offering alternative decision frameworks,
decisioning with new sources of data as well as varying loan product features to manage
risk. These alternative lenders serve a critical function by removing market friction, bringing
automation and tying loan structure to the small business.
THE CHANGING SMALL BUSINESS LANDSCAPE
17
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