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Fed Studies Small Business View of Online Lenders, Products
On Thursday, June 28, 2018, the Federal Reserve Board and the Federal Reserve Bank of Cleveland issued a press release regarding the publication of Browsing to Borrow: "Mom & Pop" Small Business Perspectives on Online Lenders. The report examines small business owners' perceptions of online lenders and their understanding and interpretation of the information that online lenders use to describe their credit products.
Among the key findings from the study, most participants were aware of the products offered by online lenders. Although some had positive views, participants also had negative impressions of the industry. While browsing the websites of online lenders, participants generally reacted favorably to those with detailed product information and were often skeptical of those that withheld product details. When presented with sample online products, participants generally found the descriptions difficult to understand or lacking detail about costs and features.