Analysis of Business Loan Terms

This Fact Sheet examines the terms of loans from major online lenders to small businesses. This analysis revealed that non-bank “fintech” loans to small businesses lack transparency regarding costs and terms, have effective interest rates up to over 350%, and include junk fees averaging $795 per loan. These loans, which resemble payday loans and the toxic subprime mortgage loans that led to the Great Recession, are made without regard to small business borrowers’ ability to repay and often trap borrowers in debt.