Decision Process; Marketing & Application Channels

Traditional, Online, and Alternative Lenders

Credit Cards, Loans, and Lines

Key Finding from the Phoenix Synergistics Survey:

According to findings from Phoenix Synergistics survey, Opportunities in the Small Business Credit Market, one-fifth of small businesses have been turned down for credit in the past two years, with most being declined by a current FI.
What are the relationship implications of denying credit to small business customers?


This study examines small business usage of various credit products and lenders, as well as their decision-making process and future demand. In addition, the channel usage and preferences of small businesses as related to credit are measured.


National Internet Survey – 800 small business owners/executives – 200 in the following sales volume categories – $50K-$99.9K; $100K-$499.9K; $500K-$999.9K; $1M-$5M.  Industry categories include manufacturing, wholesale, retail, and services.

Key Dates


June 2017 – Project Report available.

Strategic Questions

  • What is the current credit usage profile of small businesses? Which credit service is considered most important?  Are credit services held with the main provider or are these separate relationships?
  • How extensive is the role of credit cards as a source of revolving credit among small businesses? What is the relative usage of business/corporate cards and personal cards?  Are there specific reasons that personal credit cards are used for business purposes?
  • Does personal credit in the owner’s name play a role in small businesses’ financing? Which specific accounts or services are used?  For what reasons or motivations is personal credit used for business purposes?
  • How active have small businesses been recently in shopping and applying for credit? What channels have been used?  Was there comparison shopping?  What situations or problems, if any, were encountered when applying?  What features of credit providers, products, and the decision process are most important to small businesses?
  • How much of a role do non-traditional credit providers and services have in the small business market – such as vendors and suppliers, internet-only lenders, peer-to-peer lending, or private financing? What has been the experience with crowdfunding?  How much potential exists for these lending sources to capture a larger share of market?
  • How strong is the demand for credit among small businesses in the next 12 months – including both expanding usage of current services and obtaining new accounts? What channel preferences are there for information and application?  What major concerns exist regarding obtaining credit?  How have recent credit denials impacted provider relationships?
  • What variables and identifiers are best for segmenting and targeting the small business market for widening usage of credit services?  Are there approaches beyond conventional descriptors – annual sales and number of employees – such as channel preferences and receptivity to nontraditional providers?

Research Issues

  • The ability to obtain and access credit is often a “do or die” situation for small businesses.  With the recent recession and financial crisis, the small business credit market has been under pressure.  Banks and other providers did very little lending to anyone including small businesses.
  • More recently, this trend appears to be changing.  One recent survey of banking executives reported that close to seven in ten of those interviewed believed that small business lending would increase. Another source reports that banks are playing catch-up in the small business credit arena.
  • But small business lending has many more challenges today than before the recession.  The environment is extremely competitive as a host of online lenders have appeared.  These lenders can maximize technology to make lending more efficient.  Small businesses find that loan approval can occur very quickly with little to no hassle.  Today’s low interest rates are extremely attractive but the threat of rising rates is always there.  Assessing the small business credit market is critical for lenders of all types. [F253]