Fintech, Small Business & the American Dream: How Technology Is Transforming Lending and Shaping a New Era of Small Business Opportunity

Small businesses are the backbone of the U.S. economy. They are the biggest job creators and offer a path to the American Dream. But for many, it is difficult to get the capital they need to operate and succeed.

In Fintech, Small Business & the American Dream, former U.S. Small Business Administrator and Senior Fellow at Harvard Business School, Karen G. Mills, focuses on the needs of small businesses for capital and how technology will transform the small business lending market. This is a market that has been plagued by frictions: it is hard for a lender to figure out which small businesses are creditworthy, and borrowers often don’t know how much money or what kind of loan they need. Every small business is different; one day the borrower is a dry cleaner and the next a parts supplier, making it difficult for lenders to understand each business’s unique circumstances. Today, however, big data and artificial intelligence have the power to illuminate the opaque nature of a smallbusiness’s finances and make it easier for them access capital to weather bumpy cash flows or to invest in growth opportunities.

Beginning in the dark days following the 2008-9 recession and continuing through the crisis of the Covid-19 Pandemic, Mills charts how fintech has changed and will continue to change small business lending. In the new fintech landscape financial products are embedded in applications that small business owners use on daily basis, and data powered algorithms provide automated insights to determine which businesses are creditworthy. Digital challenger banks, big tech and traditional banks and credit card companies are deciding how they want to engage in the new lending ecosystem. Who will be the winners and losers? How should regulators respond? In this pivotal moment, Mills elucidates how financial innovation and wise regulation can restore a path to the American Dream by improving access to small business credit.

An ambitious book grappling with the broad significance of small business to the economy, the historical role of credit markets, the dynamics of innovation cycles, and the policy implications for regulation, this second edition of Fintech, Small Business & the American Dream is relevant to bankers, regulators and fintech entrepreneurs and investors; in fact, to anyone who is interested in the future of small business in America.

Karen G. Mills was a member of President Barack Obama’s Cabinet and served as the Administrator of the U.S. Small Business Administration from 2009 to2013. She received the U.S. Department of the Navy’s Distinguished Public Service Award for her contribution to U.S. competitiveness, entrepreneurship, and innovation. She is the President of MMP Group and has a long history of building companies as a venture capital investor.

Mills holds an AB in Economics from Harvard University and an MBA from Harvard Business School, where she currently serves as a Senior Fellow and part of the entrepreneurship faculty. She is a Member of the Harvard Corporation and the Vice Chair of the National Bureau of Economic Research (NBER). Mills lives with her husband Barry, former president of Bowdoin College, in Boston and Harpswell, Maine, and they are grateful for their children, grandchildren, and extended loving family.