FinTech and Small Business: a Dynamic Duo

Kelsey Hunt
5 min readDec 30, 2021


The world is constantly changing and ever striving to innovate and improve upon our past selves. Technology is one of the biggest developments made within this innovative society. It has changed our lives: automating mundane processes, gaining access to information in a way we have never seen before and allowing us to connect instantly with people we cannot be with in-person (particularly now, in the era of COVID-19 — forcing us into our homes and finding a way to go to classes and to work without leaving the house).

As technology was introduced into our daily lives, it didn’t only improve the immediate personal lives of the daily consumer, but development of different economic sectors arose, and this blog post will be focusing on the digitalisation of the finance sector, known widely as ‘fintech’. This convergence of finance and technology is not only important for automation of financial services, but aims to produce new products, new services, and new ways in which the financial sector may operate (Puschmann, 2017).

However, fintech isn’t only beneficial for larger corporations or businesses, but has also seen benefits in smaller businesses for both the small business owner and money lenders who provide start-up funds. With further development of fintech that is focused on small businesses and their needs instead of an average consumer — a potential for a new small business era and opportunities arises, and alongside the improvement of the small business sector lies an improvement in the economy itself.


For far too long, there has existed a myth that small businesses are ‘unpredictable’, ‘unprofessional’ and ‘too risky to invest in’, yet, if you listen to many political campaigns — most of them mention the value of small businesses. Names like Sarah Palin, Barack Obama and George Bush echo this appreciation for smaller businesses and feelings like those expressed by Hilary Clinton, a presidential candidate, “small business is the backbone of the American economy,” (Mills, 2019). Small businesses create employment and job opportunities (more than half of the working-class population are employed by small businesses), contributes to Gross Domestic Product (GDP) and play a part in activities of the export market (Tuymuratovich, 2021). Small businesses also are known to rank highly in public trust (above larger businesses and institutions) and according to a Gallup survey conducted in 2018, 67% of the surveyed population has great confidence in small businesses (Mills, 2019).

Along with the increased public approval of smaller businesses, there is a greater movement towards supporting small businesses instead of large chains, or large fast-fashion industries. The world is moving towards being more environmentally conscious, and the impacts that large institutions have on the environment (due to waste) has become increasingly covered in the media and many have chosen to support a small local coffee shop when in need of a caffeine fix or support an Etsy seller when Christmas shopping. Alongside looking to be more green, smaller businesses are favoured by the public due to recent coverage regarding use of cheap labour in some larger businesses, and exploitations of developing nations, thus many choose to support a small business knowing where their money is going instead of large chain where employees are underpaid.


Let’s start with the basics: small business lending. When starting a business, a lot of funds are required to get one going and that’s where a start-up or loan can come in handy. However, as mentioned above, many tend to look at small businesses as being an unpredictable investment as most will fail and all the ‘good’ ones would have the funds to begin with anyway.

The evolution of fintech brought small businesses looking to borrow money for a start-up solution the ‘Lending Club’, a peer-to-peer lending platform that matched lenders to borrowers. After the ‘Lending Club’, a lending platform that was geared towards small businesses (and initially e-commerce businesses like eBay) called ‘Kabbage’ was established. ‘Kabbage’ was able to partner with UPS and eBay and gathered the data that has been readily available for years on these platforms and was used to make predictions for both the small business owner and the potential small business money lenders (Mills, 2019). These predictions were focused on the needs of the small business instead of standard loan requirements.

Moving into the future, small business owners would benefit from a collective ‘small business dashboard’, which collates all the necessary information on banking and payments, taxes, and credit and loans all in one place. Now, although each of these systems have been individually improved by fintech, no single platform exists.

I have an Etsy shop, a small business I run while I study at university which involves sewing tote bags and book sleeves to fund the day-to-day expenses as a student. Etsy has a seller dashboard in their seller’s app, although only containing the information they have within the app (such as sales and Etsy fees) and it is a helpful feature, but often wish it could be expanded to include my expenses for email automations, materials required for making products and other expenses.

I can imagine this Etsy ‘dashboard’ on a far larger scale, using data that is already available through the variety of useful expense tracking systems to create a single place that will give small business owners an overview and help make major decisions that could result in the success of their business. An example described by Mills in their book ‘Fintech, Small Business & the American Dream: How Technology Is Transforming Lending and Shaping a New Era of Small Business Opportunity’, creates an image of a coffee shop owner sitting down prior to opening for the morning rush and examining their income and expenses. The owner notes they will have a large sum of money left over after payroll and various other expenses and from there can decide whether they can pay off their next instalment of their loan or invest in a new espresso machine.

The next step forward would be creating this single platform, with possibly with an AI advisor. An automated intelligence that can examine the data collected and provide advice for small business owners, like the coffee shop owner above, assisting them in which option will be the most viable one for their business’ success (Mills, 2019).


There is no doubt that small businesses are important for our economy and for a successful future. With the current success of fintech, and the potential that new software and collation of data will provide, the future of small businesses is vastly enhanced. With a focus on small businesses and their needs (instead of a regular consumer’s needs, just adapted to fit the small business profile), the redefining of what ideas would be ‘worthy’, and subsequent deconstruction of the small business ‘risky’ myth — more businesses can be started and more of them can become successful. Thus, a successful small business sector would inherently result in a better economy: more jobs, higher GDP etc.

What is the takeaway? Fintech developers should not underestimate small businesses, and in fact, they should become their focus.



Puschmann, T., 2017. Fintech. Business & Information Systems Engineering, 59(1), pp.69–76.

Tuymuratovich, A., 2021. The Importance of Small Business in a Market Economy. Academic Journal of Digital Economics and Stability (Spain), 7.