Everyone is talking about The Odyssey.
And for good reason. It is one of the oldest stories we have about temptation, risk, judgment, loyalty, distraction, and the long journey home.
Which makes it a pretty good metaphor for what is happening right now in small business lending.
Small business lending just began a journey where it will become more competitive.
While the movie has people talking about sirens, cyclopes, and epic journeys, the market itself is shifting. One of the country’s largest fintechs is quietly sailing into a market community banks and credit unions have owned for generations.
SoFi Small Business Loans launched June 30, 2026, with a familiar and powerful promise: speed. A soft credit pull. Eligibility check in minutes. Funding as soon as 24 hours later if the borrower signs by 2:45 p.m. Loans from $2,500 to $250,000. No application fee. No origination fee. No prepayment penalty. Rate disclosed before acceptance. And if the borrower does not qualify, SoFi keeps the conversation alive by routing them into its loan marketplace.
That is the siren song. Fast. Easy. Digital. No branch. No appointment. No committee. No “let me get back to you.”
For a busy small business owner, that song is hard not to hear.
But as every good Odyssey story reminds us, the loudest call is not always the safest passage.
The Cyclops only had one eye. fintech lending can suffer from a similar limitation. It excels at making fast decisions based on a narrow set of inputs. Community financial institutions see a much fuller picture — one that includes the borrower, the business, the relationship, and the local market.
That's the difference between making a fast decision and making a smart lending decision.
Most online lenders in the fintech small business view lending as an extension of the same app experience already used by millions of consumers across checking, savings, credit cards, investing, and insurance.
That matters. If a business owner already uses a fintech personally, applying for a business loan is not a big leap. It is a few taps inside an app they already open every day. And that is the real threat.
These online lenders are not trying to beat your rate. They are trying to make sure the borrower never gets far enough into a relationship with you to compare rates in the first place. They are trying to win by being visible first, easy first, and fast first.
…and the data backs this up.
The Federal Reserve’s Small Business Credit Survey shows fintech lender applications climbing from 17% of small business applicants in 2020 to 29% in 2025, according to the 2026 Report on Employer Firms. Small banks lost roughly 11% of application share over that same stretch, based on the read of the data.
But here is where the Odyssey metaphor matters. The siren song sounds beautiful from a distance. The danger shows up when you get close enough to hear the terms clearly.
The numbers do not show fintechs winning on quality.
Sixty percent of online lender borrowers said their actual costs came in higher than expected, compared with 37% at small banks and 32% at large banks. Credit union borrowers accepted their loan offers 94% of the time and reported 76% satisfaction. Online lender borrowers accepted only 84% of the time and reported 35% satisfaction, dead last among lender types surveyed.
Curt Long, chief economist at America’s Credit Unions, said it plainly: online lenders “are not winning on quality, but they are winning on visibility and ease of access.” That is the whole ballgame.
Fintechs are not necessarily building better lending relationships. They are building faster front doors. And for too many small business borrowers, that is enough to get them in the boat.
Here is the good news: community banks and credit unions are not outmatched. They have advantages that FinTech lenders cannot easily recreate.
A local lender understands the business behind the application. This is more than just knowing them as a member of the community, it is knowing the local risks. They know whether a seasonal dip is normal. They know whether new equipment is about to change production capacity. They know whether the owner has been preparing the next generation to take over.
A national fintech engine sees data. A community lender sees context. That context can be the difference between a good loan that gets approved and a good borrower who gets rejected by a rigid model.
Community institutions can structure credit in ways fintechs often cannot. An SBA guaranty. Real collateral. A deposit relationship. A treasury relationship. A broader household or business connection.
Those things matter because they reduce actual loss exposure. And when risk goes down, pricing flexibility goes up.
Community institutions can often offer a better long-term deal because they are not looking at the loan in isolation.
A bank or credit union that holds the business deposits, payroll, treasury services, and lending relationship is not selling one loan. It is protecting the entire relationship. That creates room for smarter pricing, better advice, and a more complete view of value.
Fintech lenders have to make the transaction work. Community institutions can make the relationship work. That is a major difference.
The good news is that community banks and credit unions don't have to choose between relationship banking and digital convenience.
Their competitive advantage has never been in question. It's their ability to understand borrowers, make smarter credit decisions, and build long-term relationships. The challenge is making those strengths visible early enough in the lending journey. Today's small business owners expect speed and simplicity from their first interaction, not just after they've established a relationship.
The institutions that win will be those that pair relationship-driven lending with a modern digital experience — giving borrowers a fast front door without sacrificing the judgment, flexibility, and personal service that set community financial institutions apart.
Local presence is not the issue. Credit judgment is not the issue. Relationship value is not the issue. The missing piece is delivering those strengths at digital speed.
If the borrower never reaches your front door, your better credit structure does not matter. Your local expertise doesn’t matter. Your relationship does not matter. Your better pricing does not matter.
You cannot win a comparison you never get to participate in.
The institutions succeeding today are proving that community banking and digital convenience are not mutually exclusive.
ESL Federal Credit Union grew its business loan portfolio 500% and doubled application volume using Baker Hill’s scored lending tools.
“Today, we are the number one credit union for SBA lending in New York State and number five in the U.S. for SBA loans. We take pride in our reputation as one of the nation’s top business lenders and Baker Hill has played a key role in helping us accomplish that.” —Keith Cleary, Director of Business, ESL Federal Credit Union
TowneBank has grown its loan portfolio by $10.4 billion during its more than 20-year partnership with Baker Hill.
“Since 1999, our core commitment has been to serve our customers with the highest quality services and, to deliver on that commitment, our team needs to be empowered with the best technology to serve our customers financial needs,” —John Baiocco, Senior Executive Vice President, TowneBank
These institutions didn't abandon relationship banking to compete. They strengthened it with technology that removes friction from the lending experience while preserving the local expertise, sound credit judgment, and personal service that set community financial institutions apart.
Baker Hill helps community banks and credit unions deliver the fast, digital experiences borrowers expect while preserving the relationship-driven lending model that differentiates them. The goal isn't to become a fintech. It's to remove the friction that keeps borrowers from experiencing everything your institution already does better.
Baker Hill’s SMB Digital Experience gives borrowers the ability to apply online, with data prefill and automated credit pulls built into the workflow. That creates the “apply in minutes” experience borrowers now expect, but it happens on your platform, under your brand, with your institution owning the relationship.
Baker Hill’s scored lending engine turns your credit policy into automated decision rules. Clean requests can move quickly. Exceptions can route to a human underwriter. Gray areas get reviewed instead of blindly approved or rejected. That is the difference between speed and recklessness.
You get faster decisions without adopting a one-size-fits-all risk box.
FICO’s SBSS and Experian’s Intelliscore Plus v2 are integrated directly into Baker Hill workflows. That gives institutions standardized, trusted credit inputs without having to build custom scoring infrastructure from scratch. Better yet, it considers both the business and the business owners’ credit. Having that blended credit view gives you the complete view, not a single cyclopean view that is not seeing the whole picture.
This is where community institutions can move from defense to offense. Baker Hill’s Data Pond strategy helps institutions use the data they already hold: deposits, payroll, transactions, and customer behavior.
For your existing customers, that information can create a faster, smarter, and more confident underwriting process.
And for the data outside of your walls, partnerships at Baker Hill, like the recent addition of Lumos Data, add the Prime+ score, which uses thousands of data points to create predictive credit intelligence, with data and analytics that may be out of your reach.
Technology should amplify what community institutions already do best — not replace it.
In The Odyssey, survival comes down to discipline. The crew had to know which voices to ignore, which dangers to navigate, and when to stay focused on the journey home.
Small business lending is entering a similar moment.
The fintech siren song is getting louder. With the recent addition of new players like SoFi, fintechs are betting that speed and app convenience will pull small business borrowers away from relationships they have built over years.
The Fed’s own numbers suggest many of those borrowers end up less satisfied once they get there. But by then, the relationship may already be drifting away. Sixty percent of online lender borrowers said their actual costs came in higher than expected, versus 37% at small banks and 32% at large banks. Credit union borrowers reported 76% satisfaction with the business transaction. Online lender borrowers reported only 35% satisfaction — dead last of every lender type surveyed.
Community banks and credit unions do not need to become fintechs to compete. They need to make sure borrowers can reach them before the siren song does.
Because waiting to find out whether the threat is real? That is the part of the story where ships usually hit the rocks.