Who Will Be the Winners and Losers?

Given the evolving technology, the author analyzes the potential winners and losers in the transforming small business lending landscape across four categories: (1) traditional lenders like banks, (2) Big Tech firms, (3) challenger banks, and (4) fintech infrastructure players. Each has unique advantages but also disadvantages that must be overcome. The chapter assesses how cost of capital and customer acquisition will be key determinants, and embedded finance, which leverages trusted platforms to offer financial services, is an important model in the competitive landscape. The author predicts that successful players will likely be regulated entities with strong brands and access to low-cost capital and customers. Ultimately, small businesses will benefit from increased competition and innovation.