Small Businesses Push for Transparency in Online Lending
To a small business owner looking to expand in today's tight credit market, many say their best shot at getting a loan is through a non-bank lender like an online lending company. But many are finding that the clean websites and seemingly simple terms some lenders promote hide the real cost of doing business.
Recent work by the Federal Reserve Bank of Cleveland on alternative online lenders found that a focus group of small business owners generally liked the easier access to capital that online lenders provide compared with banks. But many were confused by the terms of lending offers, which can make it nearly impossible to determine if the loan is actually affordable.