Congress must provide better regulation of alternative business lenders

Small businesses employ nearly half of the nation’s private sector’s workforce and drive the country’s growth. Yet, many of these businesses struggle to keep their doors open in the absence of reliably accessible and affordable liquidity sources. Traditional lending options fail to support small businesses due to costly infrastructure and reduced risk appetites. Community banks, once a prominent source of capital for small businesses, are no longer available for small businesses.

Four decades ago, approximately 14,000 community banks across the nation served locally-based businesses. Since 1989, over two-thirds of those banks have shuttered, leaving about 4,000 community banks surviving. Their absence has resulted in less capital available in small business communities, particularly those in minority and disadvantaged communities. Into this void, alternative business lenders have aggressively entered the market to meet the underserved demand from small businesses for readily available capital.

Read more of this Hill article by Douglas Naidus by clicking here.