Skip to main content

Small business

June 4, 2026

 

Can more data — and better data — fix the small business credit gap?

Open finance creates a fuller, more current picture of how businesses operate, giving lenders more confidence in extending financing.

google logo
Rob Pacifico profile photo

Rob Pacifico

Senior Vice President, Open Finance, Mastercard

Tammeca Rochester, a mechanical engineer turned marketer, discovered indoor cycling as a release from her stressful corporate job but said she felt isolated as the only curvy person of color in the Midtown New York City studios. So in 2016, she set out to build her own fitness space that reflected the music, bodies and community of Harlem, financing the venture through her own savings and small grants.

Two more locations later, she’s primed to grow, she told a standing-room-only crowd at Mastercard’s Small Business Summit last month in New York City. And she’s blunt about what she needs to do that.

“We need lots of money,” she said, prompting loud laughter from the audience. “Lots and lots of money to get to that next step.” 

 

Tammeca Rochester, center, with fellow small business owner Hiroki Odo, right, and moderator Julia Monti of Mastercard, discussed some of the challenges facing small businesses trying to grow at Mastercard's Small Business Summit in New York City. 

 

Why small businesses still struggle to get credit

Small businesses like Rochester’s Harlem Cycle sit at the center of the U.S. economy. They account for roughly 43.5% of GDP and just under half of private-sector employment. Yet too many small business owners like Rochester still struggle to get the financing they need: In the Federal Reserve’s 2024 Small Business Credit Survey, only 41% of applicants received all the financing they sought, while 24% received none.

At the same time, banks have tightened credit standards for small firms for the last 15 consecutive quarters. That tension defines this moment for financial services and small businesses alike. Demand for capital from small businesses is at a fever pitch. Supply is nowhere near to catching up — it’s contracting. The question is how do we close the gap? I believe the answer is not simply more capital but better data — and better decisions built on better data, enabled by open finance.

For years, underwriting was optimized for information that was easy to standardize and readily available. That model made sense for its time. But it also produced a backward-looking snapshot of a business, not a complete picture of its financial health. Small business lending effectively worked like this: Send over last year’s financial statements, make an educated guess about what happens next, and decide whether to extend credit. It is a slow model — and a brittle one. A business can look strong on revenue and still be financially fragile because of cash-flow timing. If you can’t see those distinctions, you are missing a critical part of the picture — and too often the default outcome has been to decline small business applicants.

 

What is open finance and why it matters

That reliance on incomplete, backward-looking data is no longer necessary. Open finance enables businesses to share permissioned, real-time financial data, giving lenders a more current and complete view of performance. With access to richer signals — from cash flow to transaction-level behavior — underwriting can shift from static snapshots to a far more precise understanding of how a business actually runs.

The immediate benefit is clear: faster, more accurate underwriting. But the real shift is more fundamental. Underwriting stops being a single moment in time — approve or decline based on a static file — and becomes a continuous capability that spans the full customer life cycle. Prequalification, pricing, line assignments, servicing, repayment: Each decision gets sharper when it's informed by current, complete data.

The question shifts from simply whether a business qualifies to how much financing makes sense, on what terms, at what price, and with what ongoing monitoring, engagement and servicing strategy to support mutual success over time.

 

 

Better data leads to better decisions, and better decisions create stronger pathways to growth for small businesses. 

Rob Pacifico

 

 

At Mastercard Open Finance, we have brought together two layers of insight that, until recently, did not exist together in one place. The first is Small Business Credit Analytics, which provides near-real-time sales data, trends and peer benchmarking sourced from the Mastercard network. That capability is now integrated into the Mastercard Open Finance platform, where it can be used alongside open banking and cash-flow data — including cash inflows, outflows, balances and the transaction-level context that reflects a business’s day-to-day financial reality.

Together, these signals provide a more comprehensive view of health, momentum and cash position, enabling more nuanced and fine-grained decisions than traditional methods alone provide.

We launched this integrated capability in February, and the opportunity is clear. When lenders can combine permissioned banking data with network-based commercial insights, they can move faster, assess risk with greater precision and serve small businesses with products that are better aligned to how those businesses actually operate. This is not just about speeding up credit decisions; it’s about improving the quality of those decisions from the start and creating a stronger foundation for the relationship that follows.

 

What this means for financial inclusion

Too often, more inclusive lending is misunderstood. People hear ”more approvals” and think ”more risk.” That’s wrong. Financial inclusion done well is about better evaluations, not lowering standards. Cash-flow data is essential for making sharper distinctions between businesses that may look similar through a traditional lens but present very different risks in practice. And the willingness of small businesses to share that data is there: Our research shows that many small businesses are ready to permission access to their data if it means faster and fairer access to credit.

The infrastructure to make this possible exists today. If we want to expand access to capital in a way that is responsible, scalable and sustainable, we need to give lenders a fuller, more current understanding of the businesses they serve. Better data leads to better decisions, and better decisions create stronger pathways to growth for small businesses. That is the promise of open finance, and it’s one we’re already delivering on.

 

How open finance improves access credit for small businesses

By drawing on data that’s been permissioned by the business owner, the service offers a more comprehensive and insightful view of a business’s health, performance trends and cash position. 

Learn more