Small Businesses Used to Get Loans From Local Banks. Not Anymore.
With the help of lending programs, small businesses can take advantage of working capital loans to propel themselves to the next stage of growth. However, applying and getting approved for these loans is tougher than you might think. Per the Federal Reserve’s Small Business Credit Survey, only 42% of applicants received the full amount of financing they sought from their bank or lender.
What do you do when your loan is denied or only partially accepted? You go try somewhere else.
Small businesses have three types of places to turn when seeking working capital loans. They can try a large national bank, a smaller community bank, or a fintech.
Community banks have long been the standard preference for small business loan applicants. Compared to larger banks, they usually make much faster lending decisions and offer more flexible underwriting since they know the local economy and business environment more intimately.
In 2014, the Small Business Credit Survey found that 44% of working capital loan applications were sent to community banks. Another 29% were sent to the Big Four, while fintechs only received 11% of the working capital loan applications that year.
In the past decade, those splits have shifted.
In 2020, both community banks and the top four banks received 33% of applications, while fintechs received 22%. Interesting. In 2025, fintechs and community banks both received 28% of applications, while the big four received 38%.
When it comes to the volume of working capital loan applications over the past decade (relative to each other) fintechs grew 154%, the top four banks grew 31%, and community banks fell by 36%. In 2014, it would have been crazy to think fintechs would reach local banks in the near future, but it happened.
There’s a lot to unpack here.
The Big Four
Big banks traditionally have strict requirements for working capital loans. They often require extensive underwriting and come with high minimum requirements ($100,000+). From the point of view of a bank like JPMorgan, lending money to a local business is high-risk, low reward.
That said, national banks have by-and-large expanded their Small Business Administration (SBA) loan offerings, allowing a larger swath of small businesses to apply. Additionally, the MARC (Manufacturer’s Access to Revolving Credit) Loan was created in 2025, giving businesses in the manufacturing sector a specialized loan opportunity. In turn, we’ve seen a moderate 31% uptick in applications to the top four US banks.
Fintechs
On the other side of the spectrum are fintechs, which are modern banking platforms that often offer fast, flexible working capital loans to businesses of all sizes. Unlike with most loan applications through traditional banks, fintechs accept and review loans entirely online with digital documents and banking information. From there, approvals and rejections are typically much quicker.
For example, Slash offers working capital financing with 30, 60, and 90 day repayment cycles.⁵ The underwriting process evaluates a combination of a business’s ability to repay and their available collateral. From there, loans may be approved and paid out in less than a business day. With the rapid growth of the fintech market and their accessible, fast loans, it’s no wonder applications have increased more than 150%.
Community Banks
The gradual fall of loans from community banks may owe more to the rise of fintechs and big banks than any single failure on the other end. If you’re looking for an immediate loan, or if you’d prefer a reliable, in-person option, community banks aren’t necessarily the automatic choice anymore.
Additionally, the world is always getting more digital-native. Years ago, online businesses and online lending options were a bit rarer than they are today. In 2026, you can easily create a business, apply for a loan, and receive that loan without ever leaving your bedroom. There’s true value to forming a relationship with your local bank, but as long as there are easier avenues, people will take them.
While each of these three lenders have shifted in popularity over the last decade, they’ve actually ended up taking similar pieces of the working capital loan pie. The big four banks can serve manufacturing businesses and other growing companies, fintechs can serve online-native businesses who need immediate, flexible loans, and community banks are solid options for brick-and-mortar businesses that rely on their local economy. Whichever category you fall into, there may be an influx of working capital for you around the corner.
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