Why did small business fintech lending dry up during march 2020?

Itzhak Ben-David (The Ohio State University and NBER), Mark Johnson (Brigham Young University), René M. Stulz (The Ohio State University, NBER and ECGI)

With the onset of the COVID-19 crisis in March 2020, small business lending through fintech lenders collapsed. We explore the reasons for the market shutdown using detailed data about loan applications, offers, and take-up from a major small business fintech credit platform. We document that while the number of loan applications increased sharply early in March 2020, the supply of credit collapsed as online lenders dropped from the platform and the likelihood of applicants receiving loan offers fell precipitously. Our analysis shows that the drying up of the loan supply is most consistent with fintech lenders becoming financially constrained and losing their ability to fund new loans

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Year of publication:	August 24, 2021
Authors:	Ben-David, Itzhak ; Johnson, Mark J. ; Stulz, René M.
Publisher:	[Columbus, Ohio] : The Ohio State University, Fisher College of Business, Charles A. Dice Center for Research in Financial Economics
Subject:	fintech \| small business lending \| COVID-19 \| credit supply \| Kreditgeschäft \| Bank lending \| Coronavirus \| KMU \| SME \| Finanztechnologie \| Financial technology \| Welt \| World \| Unternehmensfinanzierung \| Corporate finance \| Kredit \| Credit