June 12, 2013
Small business journalist and friend Kent Hoover jumped all over yesterday’s statement by Treasury Secretary Jack Lew that perhaps it’s time the government shares all of the data it collects about a small business with lenders.
Speaking at summit cohosted by the Treasury and SBA Lew said, “Government can help develop new ways for business owners to supply creditors with the kind of information that can lead to the distribution of more loans. Small businesses report a lot of useful information to the government on things like employee rolls and business expenses. If we could help these businesses share their information electronically when applying for credit, small businesses and entrepreneurs might have an easier time getting loans.”
The comments were offered when describing how alternative lenders have junked traditional cash flow standards and are using Big Data to underwrite small business loans and fund a loan in as little as seven minutes.
Kent snarks, “So are you ready to let lenders see practically everything there is to see about your business? Many small businesses are because “they need the money.” It’s a tradeoff — less privacy for more money. But that’s the world we live in — just listen to President Barack Obama talk about balancing privacy vs. national security. Now the government and lenders could share data — what could possibly go wrong?”