They’re Just Not That Into You: The One-Sided Love Between Banks and Business Owners

Small business financing in America is no fairy tale.

Although 40% of small employer firms applied for financing last year, big banks are only approving about 26% of applicants. That means the majority of businesses that need capital are being stood up by big banks.

The result: our nation is losing more small businesses than we’re starting. Just 1 in 7 US metro areas is keeping pace with the national startup rate, while corporate profits as a share of the GDP have seen unprecedented growth in recent years. The gap between big and small, rich and poor, is getting wider.

Despite the meager success rates at big banks, business owners are 4 times more likely to seek financing at a bank than any other kind of lender.

Why — when the odds are so clearly stacked against them — do business owners keep going back to the bank? And what will happen to our economy if they don’t get capital elsewhere?

Where’s the Love for Small Business?

Let’s talk about the root of the problem: big banks are not the best place for small business owners to find financing.

While many are quick to point a finger and cry “conspiracy!,” there is no sexy…