Two entrepreneur advocates have warned Congress that fintech lenders are harming many small businesses in the U.S.
Small Business Majority founder and CEO John Arensmeyer said small business owners are victimized by the predatory practices of unregulated online lenders, particularly in rural areas where business owners have limited access to traditional loans. He argued that the small business lending industry should be built on fairness and transparency and the rights of the borrowers must be at the center of the lending process.
Arensmeyer co-authored The Small Business Borrowers’ Bill of Rights to help entrepreneurs secure loans without having to deal with fraudsters. Sabrina Parsons of Main Street Alliance said the high interest rates charged by online lenders sometimes force small entrepreneurs out of business.
While U.S. Chamber of Commerce Small Business Policy Chief Tom Sullivan argued that there are fintech firms that are helpful to small business like Intuit and Square, Democratic legislator and Small Business Committee chair Nydia Velasquez sided with the advocates stating that that online lenders should be as transparent as other sources of loans for small business borrowers.