--- url: 'https://lonelyentrepreneur.com/founder-where-you-already-bank/' title: 'At Large Banks, 61% of Small-Business Applicants Named an Existing Relationship. At Online Lenders, 64% Named Speed' author: name: Samantha Lankford url: 'https://lonelyentrepreneur.com/author/sam/' date: '2026-10-20T16:00:07-04:00' modified: '2026-10-20T16:00:08-04:00' type: post summary: 'Fed survey data on why small employers chose a lender: at large banks 61% named an existing relationship. At online lenders, 64% named speed.' categories: - Blog Post image: 'https://lonelyentrepreneur.com/wp-content/uploads/2026/10/founder-where-you-already-bank-hero.webp' published: true --- # At Large Banks, 61% of Small-Business Applicants Named an Existing Relationship. At Online Lenders, 64% Named Speed ![The Lonely Entrepreneur](https://lonelyentrepreneur.com/wp-content/uploads/2024/01/TLE_Logo_mobile-490W-26-26.png)Founder Data Report ![At Large Banks, 61% of Small-Business Applicants Named an Existing Relationship. At Online Lenders, 64% Named Speed](https://lonelyentrepreneur.com/wp-content/uploads/2026/10/founder-where-you-already-bank-hero.webp) Founder Data Report # At Large Banks, 61% of Small-Business Applicants Named an Existing Relationship. At Online Lenders, 64% Named Speed By Michael Dermer • Updated October 20, 2026 Get clarity — download the free Entrepreneur Survival Guide Summary. [Download the Survival Guide →](https://lonelyentrepreneur.com/esg-overview/?utm_source=blog-cta) Federal Reserve survey data on why small employers chose the lender they applied to: at banks, a relationship they already had; at online lenders, speed. Quick Answer In the Federal Reserve Banks’ 2025 Small Business Credit Survey, **61%** of employer firms that applied for a loan, line of credit or cash advance at a **large bank** said an **existing relationship with the lender** was a factor in applying there; at **small banks**, 62%. At **online lenders**, **speed of the decision or funding** was named by 64%, and 31% named a relationship. The 30-second version - Applicants at large banks: 61% named an existing relationship as a reason they applied there. Small banks: 62%. - Applicants at online lenders: 64% named speed. 31% named a relationship. - 28% of online-lender applicants said being turned down by another lender was a factor. At banks, 11% to 12%. - At small banks, 54% of applicants with 1 to 4 employees named a relationship; at 50 to 499 employees, 86%. - The survey asks why firms chose where to apply. It does not say a relationship got anyone approved. ## Why owners walk into a bank The Small Business Credit Survey, run by the twelve Federal Reserve Banks, asks firms that applied for financing what led them to each lender, and lets them name more than one reason. At banks the answer is lopsided. Of the employer firms that applied at a large bank, **61%** named an existing relationship with the lender; the next most common reason, the chance of being funded, was named by 37%. At small banks the figures were 62% and 33%. Large and small banks are statistically level on this; both are clearly above online lenders (31%), finance companies (32%) and community development lenders, CDFIs (16%). The Data Share of applicants who named an existing relationship as a reason they applied, by type of lender Large bank61%Small bank62%Credit union49%Online lender31%Finance company32%CDFI16% Employer firms that applied for a loan, line of credit or merchant cash advance at each type of lender. Orange: banks. Applicants per lender type: 132 to 957. Axis 0 to 100%. Federal Reserve Banks, 2025 Small Business Credit Survey, 2026 Report on Employer Firms data appendix (updated March 3, 2026), retrieved October 10, 2026. Share of firms that applied for a loan, line of credit or merchant cash advance at each type of lender; respondents could name more than one factor. Firm size shows up at small banks. Among firms with 1 to 4 employees that applied at a small bank, 54% named a relationship; among firms with 50 to 499 employees, **86%**, a gap the survey’s margins of error can separate. At large banks the size pattern is not clear enough to call. > At a bank, most applicants were already known there. At an online lender, most named speed. ## Why they go online instead The reasons flip at online lenders. **64%** of applicants named the speed of the decision or the funding, against 29% at large banks and 28% at small banks. 49% named the chance of being funded and 38% that no collateral was required. Applicants at finance companies, which include equipment dealers and auto finance companies, named speed at 44%, more often than at either kind of bank. At credit unions the two most-named factors were a relationship, 49%, and cost or interest rate, 43%, well above the 18% at online lenders. At CDFIs, a recommendation or referral was named by 37%, more than at either kind of bank. The Data Existing relationship against speed, as reasons for applying, by type of lender Large bank Existing relationship61% Speed of decision or funding29% Small bank Existing relationship62% Speed of decision or funding28% Credit union Existing relationship49% Speed of decision or funding24% Online lender Existing relationship31% Speed of decision or funding64% Finance company Existing relationship32% Speed of decision or funding44% CDFI Existing relationship16% Speed of decision or funding36% Share of applicants at each type of lender naming each factor. Slate: existing relationship. Orange: speed of decision or funding. Respondents could name more than one factor. Axis 0 to 100%. Federal Reserve Banks, 2025 Small Business Credit Survey, 2026 Report on Employer Firms data appendix (updated March 3, 2026), retrieved October 10, 2026. Share of firms that applied for a loan, line of credit or merchant cash advance at each type of lender; respondents could name more than one factor. ## The applicants who had already heard no One answer on the list is not about the lender at all. **28%** of firms that applied at an online lender said being denied by another lender was a factor in applying there, against 12% at large banks and 11% at small banks. The finance company figure, 18%, cannot be told apart from the online one in this survey. The survey does not say which lender turned them down or why. The Data Share of applicants who said being denied elsewhere was a reason they applied, by type of lender Large bank12%Small bank11%Credit union18%Online lender28%Finance company18%CDFI16% Orange: online lenders. Respondents could name more than one factor. Axis 0 to 100%. Federal Reserve Banks, 2025 Small Business Credit Survey, 2026 Report on Employer Firms data appendix (updated March 3, 2026), retrieved October 10, 2026. Share of firms that applied for a loan, line of credit or merchant cash advance at each type of lender; respondents could name more than one factor. ## What to take from this if you will need to borrow Most owners who applied at a bank in the year before the survey went to one that already knew them. Most of those who applied online named speed, and 28% said a denial elsewhere was a factor. None of that says a relationship gets you approved; the survey asked why firms chose a lender, not what the lender decided. What it does say is where the people who chose banks started from. If your business has no lender that knows it before you need the money, the realistic question is which door you will be walking through when you do, and whether speed will be the reason. Three limits worth holding. These are **employer firms that applied** for a loan, line of credit or merchant cash advance in the prior twelve months, not all businesses. A firm that applied at two kinds of lender answers for each. And the shares are **reasons named, not ranked**: respondents could pick several, so they do not add up. The Data Where the numbers land 61% of large-bank applicants named an existing relationship 64% of online-lender applicants named speed 28% of online-lender applicants named a denial by another lender as a factor 86% of small-bank applicants with 50–499 employees named a relationship Federal Reserve Banks, 2025 Small Business Credit Survey. ## Frequently Asked Questions Why do small businesses choose the bank they apply to? An existing relationship is the most common answer at banks. In the Fed's 2025 Small Business Credit Survey, 61% of employer firms that applied at a large bank, and 62% at a small bank, named an existing relationship. Why do businesses apply to online lenders? Speed and the odds of approval. 64% of online-lender applicants named the speed of the decision or funding; 49% named the chance of being funded. Do online-lender applicants cite a denial elsewhere more often? Yes. 28% named a denial by another lender as a factor, against 12% at large banks and 11% at small banks. Does a banking relationship get a loan approved? This survey question cannot say. It asks why firms chose where to apply, not how the application went. Where does the data come from? The Federal Reserve Banks' 2025 Small Business Credit Survey, 2026 Report on Employer Firms data appendix, which publishes a 95% confidence interval with every share. Keep reading - [At Big Banks, 85% of Approved Firms With 50 to 499 Employees Were Satisfied. With 1 to 4 Employees, 56%.](https://lonelyentrepreneur.com/founder-who-the-bank-satisfies/) - [When Money Got Tight, 58% of Owners With 1 to 4 Employees Used Their Own Funds. At 20 to 49, the Business’s Reserves Came First.](https://lonelyentrepreneur.com/founder-the-owners-own-money/) - [Under 10 Employees, the Top Problem Is Customers. From 20 Up, It Is Finding and Keeping Staff.](https://lonelyentrepreneur.com/founder-the-problem-that-changes/) Part of the entrepreneurial struggle: [Trust Gap](https://lonelyentrepreneur.com/entrepreneur-struggle/trust/) ![The Lonely Entrepreneur](https://lonelyentrepreneur.com/wp-content/uploads/2024/01/TLE_Logo_mobile-490W-26-26.png) Published by **The Lonely Entrepreneur** — the community and coaching platform for entrepreneurs who are building alone. [lonelyentrepreneur.com](https://lonelyentrepreneur.com/) This article is for educational purposes and is not a substitute for professional financial or legal advice.