Business Lending
California Bill Asserts Businesses Generating Up to $18 Million/Year in Sales Need Consumer Protections
March 10, 2026California’s AB2116 is proposing to amend the state’s Consumer Financial Protection Law and declare that small businesses generating less than $18 million a year in revenue be considered a consumer for the purpose of consumer financial protections.
“Small business” means a business entity organized for profit with annual gross receipts of no more than sixteen million dollars ($16,000,000) or the annual gross receipt level as biennially adjusted by the Department of General Services in accordance with Section 14837 of the Government Code, whichever is greater.-AB2116
The DGS alternative, when applied to the “whichever is greater” test, currently sits at $18 million, making that the current applicable baseline for what is small.
“Small business owners are often similarly situated as consumers with regards to their sophistication and bargaining power relative to providers of financial services and products,” the bill says. “Many of the rationales supporting legal protections for consumers apply also to small business owners. Small businesses have a better chance to survive and grow if they are able to access safe and effective financial products and are protected from unfair, deceptive, or abusive practices when accessing financial products and services.”
For comparison’s sake, deBanked tracked one online small business lender that originated $200 million in business loans that generated just $14.3M in revenue. Per the bill, this lender would also be presumed an unsophisticated consumer that is unable to bargain on financial service products without consumer protections.
Lending Tree: “The merchant cash advance market is a strong market that is growing”
March 3, 2026
“The merchant cash advance market is a strong market that is growing,” said Lending Tree CFO Jason Bengel during the company’s Q4 earnings call.
Small business financing has become an increasing priority for the financial services referral platform.
“…we have continually invested in additions to our small business concierge sales force, allowing us as well as lenders on the network, to help a greater number of business owners find the best loan options for them while guiding them through the often complex process of completing their application through to funding,” said Lending Tree CEO Scott Peyree.
Though Lending Tree is considered a platform, they describe themselves as a business loan broker, one with a name that helps lenders reach merchants they would otherwise never be able to connect with.
“A lot of our small business lenders, for example, they do not even write direct to merchant,” Peyree said. “They write loans through brokers like us. Deep API logged-in access for us to get their loan information, these consumers do not even know that these companies exist, outside of talking to us to get a loan.”
NerdWallet: LLM Referrals Convert Much Better, Licensing Regulations A Barrier to AI Shopping Takeover
March 3, 2026“…in terms of what we’re seeing on our side, the conversion rates on that LLM referral traffic are much higher and growing rapidly,” said NerdWallet CEO Tim Chen during the Q4 earnings call. “People, I think, are searching more both on traditional search engines as well as LLMs.”
NerdWallet had taken a hit on organic search traffic throughout 2025 due to search engines like Google adjusting organic search layouts and rankings but they’ve made up for the lost business by a combination of paid marketing and referrals coming in from AI. Although the AI LLM traffic isn’t enough to replace the loss in organic search traffic, those referrals are said to have a much better conversion rate. The LLMs themselves aren’t a threat to replace the entire shopping experience, however, because of existing regulations.
“I mean I think if you think about the scenario where you’re trying to do some form of agentic shopping or LLMs are trying to get more integrated, there’s kind of 2 obstacles you really need to think about,” said Chen.
So the first is regulatory. For example, you can’t get an insurance quote from someone without an insurance license. And so if you look across, for example, credit, insurance, mortgages and investing, they require licensing where institutions need deterministic and compliant outputs, not probabilistic answers.”
NerdWallet is a platform that connects consumers and SMBs with financial products.
Quickbooks Capital: Another $1.3B Funded to Merchants, Has Protective Moat from AI
March 2, 2026Intuit’s Quickbooks Capital originated $1.3B in business loans to its customers for its fiscal Q2 2026. The number was a repeat of the previous quarter but still puts them on a trajectory to surpass yet another rival (Shopify Capital) on originations in 2026.
Quickbooks users are presented a “button” in their Quickbooks software to obtain funding.
“We are switching that conversation from being a sales pitch to helping address a customer need,” said Intuit CFO Sandeep Singh Aujla during the latest quarterly earnings call. “As an example, our customer could have a payroll due tomorrow, but the invoice is not going to get paid till next week. With a click of a button, they can access the Capital loans. Payroll is done. The employees are paid. Employees are happy. Next week when the customers pay the invoices, the agent automatically pays down the debt.”
When an analyst raised a concern about their partnership with LLMs, Intuit said there was nothing to worry about because their data is not shared with the LLMs.
“Our moat comes from being the core of the flow of funds, whether it is access to capital, whether it is hours worked by the employees, whether it is money flow—that is not being touched by these LLMs,” said Aujla.
Square Loans: $7 Billion Funded in 2025, Block Lays Off 40% of All Staff Due to AI
February 26, 2026Square Loans finished 2025 with a whopping $7 billion funded to merchants. And just as has been the case previously, payment performance on these loans has been so good that “the amount of loans that were identified as nonperforming loans was immaterial,” according to the year-end report.
Despite Square Loans being the largest originator of online business loans in the country that deBanked tracks, the product is merely a value-add to its parent company’s (Block) merchant processing and point-of-sale business. Block’s year-end figures were overshadowed by the announcement that it was laying off 40% of its staff on the basis that AI has unlocked new efficiencies that no longer require such a high headcount. Layoffs amounted to more than 4,000 employees in a single day.
“We’re not making this decision because we’re in trouble,” Company CEO Jack Dorsey wrote on X following the news. “Our business is strong. gross profit continues to grow, we continue to serve more and more customers, and profitability is improving. but something has changed. we’re already seeing that the intelligence tools we’re creating and using, paired with smaller and flatter teams, are enabling a new way of working which fundamentally changes what it means to build and run a company. and that’s accelerating rapidly.”
Biggest Challenge of Low Cost Business Lending: The customers couldn’t distinguish the difference
February 26, 2026In a podcast between Ballard Spahr attorney Alan S. Kaplinsky and Executive Director of the Responsible Business Lending Coalition Louis Caditz-Peck, the latter revealed one of the biggest revelations he had while previously working in the small business lending division of LendingClub. Winning on price doesn’t work if your customers don’t realize your product is actually a lower price.
“[…] part of that strategy [LendingClub] was to be the lowest cost financing that a small business could get online while properly managing risk and be as fast and easy as some of the fastest and easiest financing a business could get online,” said Caditz-Peck. “And what I found was that strategy of being lower cost really had challenges because customers could not tell that our products were lower cost and that was our biggest challenge.”
Caditz-Peck gave an example of how a quoted “rate” might have different meanings or reflect a different aspect of a deal:
“What was a challenge to our business was losing deals over and over again to competitors that were offering a much worse product, because the customer can’t tell. So this is a San Francisco open floor plan. And I can hear all the conversations happening of our folks that are talking to the small business owners, the kind of loan officer type folks, and they were having this conversation just constantly where they would say, ‘hey, Alan, congratulations, you’re pre-approved. We can lend to you at ________.’ The average APR at the time was about 22% that we were charging. ‘So we can get you financing at 22%’ and the small business borrower would often say, ‘Well, such and such company is offering me 10%’ and then our loan officer would say, ‘okay, but when they say 10%, what is that? Is that an APR? is it an interest rate?’ Usually it was bullshit. It just meant it was a percentage number that had no relationship to how we compute a real interest rate, and was probably equivalent to an interest rate of—in some cases if they’re saying 10% maybe it was like 40%, maybe it was like 300%, but this business owner didn’t know who to trust, and so that was squelching innovation, and that is what continues to be squelching innovation.”
Stripe Capital Originated 81,000 MCAs and Business Loans in 2025
February 25, 2026
Stripe, currently in the news for its $159 billion valuation and its potential interest in acquiring PayPal, originated 81,000 merchant cash advances and business loans in 2025 through its subsidiary Stripe Capital. Stripe didn’t say what that equated to in total funding volume but when compared to a rival’s (Square Loans) historical data, it puts it in the likely range of $800 million to $1.2 billion.
Stripe recently conducted a study to measure the impact of Stripe Capital on its customers and found that “businesses that accepted Capital offers grew 27 percentage points faster over the following year than comparable businesses that didn’t.”
“The averages conceal a wide spread,” the company said. “The fastest-growing decile of financed businesses grew more than 3× faster than comparable peers; the next decile grew nearly 100 points faster. A representative example: Xirsys, a server hosting business based in California, used financing from Stripe Capital to set up additional servers in China, India, and Japan, subsequently doubling its revenue. Notably, even businesses with low credit scores grew 11 to 18 percentage points faster after receiving financing.”
Stripe’s rumored interest in PayPal is also notable in the fact that PayPal also has a business loan program. Last year PayPal funded $2.2 billion to small businesses, down from $3 billion in 2024.
BHG Financial Originations Surge to $6.1B in 2025
February 20, 2026“With regards to BHG, that team down there just continues to deliver, you can see that with their performance in 2025,” said Pinnacle Financial Partners CFO Jamie Gregory on the company’s recent Q4 earnings call. Pinnacle owns 49% of BHG Financial. BHG’s average business loan is between $20,000 to $250,000. It also does personal loans. Combined they originated $6.1B in 2025, up from $3.7B in 2024.
Pinnacle has been very impressed with BHG’s performance and outlook going forward.
“I mean we’re talking 25% to 35% growth for the company,” said Gregory. “So they continue to perform. And I go through all that because it just shows that they are focused on their core business. They’re focused on growing it, adding value.”
In the earnings presentation, it says that BHG targets borrowers through direct mail and “other sophisticated marketing techniques using a wide range of proprietary marketing tools.”
