Small businesses rush to borrow online, sparking fears of high rates, costly terms

Johnathon Bush, the owner of Not Just Cookies bakery in Chicago, said he did a brisk business at farmers markets during the summer, but he faced a cash crunch in November 2018, just as he was gearing up for the holiday season.

After a bank rejected his loan application, he borrowed a total of $38,000 from two online lenders, which required him to pay back $56,000, including fees. The lenders immediately began withdrawing $450 from his bank account every day, eating up most of his average daily sales of about $600.

Publication: 
Wall Street Journal
URL: 
Show HP: 
True
Topic New: 
Access to Capital