A new report published by Oxford Economics indicates that a decade after the financial crisis, American small businesses continue to be neglected by banks.

The “Big Business of Small Business” report, launched in partnership with Funding Circle, finds that despite the vast economic output generated by small businesses, banks are continuing to focus on loans to larger companies, the Corridor Business Journal reported. While commercial lending is increasing overall, the report noted, banks relaxed their approval standards and interest rate spreads for loans to large and middle-market businesses far more than they did for small companies in 2018, putting smaller businesses at a disadvantage against larger competitors. 

Small businesses are responsible for 47.5% of U.S. employment, but lending to this segment remains a tiny proportion of U.S. banks’ overall balance sheets — less than 1%.

 

As a result, small businesses are increasingly moving on to alternatives offering a faster, more efficient experience without sacrificing on cost and transparency. In 2018, 32% of U.S. small businesses seeking finance turned to online providers, up from 19% two years prior