Collaborative Research: A Multi-faceted Analysis of Small Business Lending Dynamics

Small businesses form the backbone of the U.S. economy, yet significant disparities exist in access to capital and entrepreneurial opportunities for various demographic groups. This project seeks to advance national prosperity and welfare by dismantling systemic obstacles that prevent equitable participation in entrepreneurial activities. By developing novel research tools to examine underlying market frictions and facilitate inclusive funding opportunities, the project holds promise for empowering underserved communities, unlocking untapped economic potential, and creating a more level playing field for all aspiring entrepreneurs nationwide. The project establishes two interconnected research infrastructures with a cross-country scope: (1) The Small Business Lender Preference and Perception (SBLPP) database, consolidating survey data on nearly 9,300 U.S. community banks and credit unions regarding their lending preferences, market perceptions, and institutional strengths and (2) FundMatch, an online platform using SBLPP data to match entrepreneurs with lenders aligned to their financing needs and preferences, reducing search frictions. FundMatch enables field experiments identifying and addressing demand-side barriers like borrower discouragement. This researcher-entrepreneur-lender nexus yields actionable insights to foster inclusive entrepreneurial ecosystems and drive equitable economic development across regions. This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.