Small businesses offer economic opportunity to many Americans, providing nearly half of total private sector jobs in the country. Though access to finance is critical to small business success, many struggle to secure affordable credit. Promising technological innovation is presenting new opportunities for small businesses to access the capital they need to grow and thrive, but predatory lending tendencies are on the rise. Despite the promise that technology can unlock better options for small businesses, some financial products have been found to have exorbitant costs, unclear terms, and deceptive marketing. Press coverage in Forbes and Businessweek feature headlines such as: “Predatory Lending Machine Crushing Small Businesses Across America.”
In response to these practices, a diverse group of non-profit and for-profit lenders, investors, and small business advocates have come together as the Responsible Business Lending Coalition (RBLC) to advocate for more responsible lending practices. The RBLC has become a force in the small business lending ecosystem, championing transparency, fairness, and accountability norms and standards in the industry.
This case study explores the motivations that propel the RBLC and examines the strategies it employs to create change. Through coalition building and legislative advocacy, the RBLC has spearheaded efforts to enhance regulatory frameworks and promote a culture of responsibility within the financial sector.