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Insights and Expertise

Empowering SMB prospect of lower interest rates has fueled some levels of
confidence among business owners.
growth through Capitalizing on emerging opportunities requires seamless

and swift access to funding. Fintech firms and many
digital lending financial institutions are already integrating automation
into the SMB lending process to accelerate decision-
making and disbursement.

Additionally, investing in their own digital lending
infrastructure or forming strategic partnerships with
leading lending-as-a-service (LaaS) fintech providers
enables banks to maintain an edge in a hyper-competitive
market.

Enhancing scalability and efficiency in SMB lending
Many banks continue to tread cautiously when it comes to
expanding their SMB lending efforts due to perceived risk
and operational complexities. Typically, SMB lending has
been associated with high origination costs and inefficient
manual processes that make scalability difficult. Tackling
these challenges can be accomplished by leveraging data-
By Will Tumulty driven automation that reduces costs, mitigates risk and
Rapid Finance enhances the borrower's experience.

n the United States, small and midsize businesses Banks possess large volumes of existing customer data
(SMBs) form the foundation of local economies that is often an underutilized asset in streamlining SMB
and play a key role in the broader U.S. economic lending. This is largely due to fragmented and outdated
I landscape. The last quarter of 2024 saw a surge in
optimism among small business owners that continued
into the new year.
Key trends in SMB lending (2024–2025)
However, this optimism is now being tempered by As banks explore new approaches to serving SMBs,
emerging economic disruptions that are increasing levels these recent trends offer valuable insights into the
of uncertainty. evolving landscape of small business lending:

Despite this, U.S. Chamber of Commerce data indicates • Optimism amid uncertainty: Despite economic
that two-thirds of SMBs continue to hold a positive challenges, 66 percent of SMBs maintain a posi-
attitude about their financial outlook for 2025 and that tive financial outlook for 2025. – U.S. Chamber
58 percent reported capital outlays in the last six months of Commerce
with 19 percent planning capital purchases in the next • Digital transformation: 61 percent of mid-sized
three months alone (see https://www.uschamber.com/ banks are investing in fully automated lending
small-business/small-business-weekly-forecast). processes to enhance efficiency and competi-
tiveness. – PYMNTS.com
For SMBs, unlocking liquidity is vital for achieving
growth and can be accomplished through increasing • Fintech integration: Approximately 30 percent
profit margins, improving inventory management and of small banks are utilizing fintech solutions in
securing working capital financing. their lending processes, with an additional 21
percent exploring such technologies. – FDIC
Banks with the right solutions in place can position • Alternative lending growth: Alternative lend-
themselves to help SMBs access the capital required to ers have the highest loan approval rates, accept-
grow, while establishing long-term relationships that can ing over 28 percent of small business applica-
endure – even in times of uncertainty. tions as of March 2024. – CRS Credit API
How banks can best serve SMB customers • AI adoption: 58 percent of small business own-
ers are actively deploying AI tools, with 70 per-
Timing is a critical factor for small businesses, and despite cent planning to increase their investment in AI
the trillion-dollar market for business financing, many technologies. – U.S. Chamber of Commerce
SMBs struggle with obtaining timely access to capital.
While inflationary and new tariff concerns persist, the
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