The Use Of Cash-Flow Data In Underwriting Credit: Small Business Spotlight

Overview Paper

Report Summary

The Small Business Spotlight report provides a broad picture of the use of cash-flow data in the small business lending market and an overview of policy issues that may be particularly important in determining the pace of adoption going forward.

The report tracks growing use of bank account and other cash-flow data across a diverse range of providers, including marketplace lenders, traditional banks, community development organizations, and other new entrants. The data is useful because it provides a more detailed, timely picture of small businesses’ income flows and cash reserves than traditional credit history information.

While use of cash-flow data appears to be spreading more rapidly in small business lending than consumer lending, a number of market and policy issues could affect its further adoption. These issues include technology and cost hurdles for small banks, data security and privacy considerations, and increasing confidence in the reliability of the data among investors and regulators.


We particularly would like to thank Aron Betru, Dan Murphy, Jackson Mueller, and Mike Piwowar with the Milken Institute Center for Financial Markets for their engagement with this work.

We are particularly grateful to Arthur Baines and Marsha Courchane, Charles River Associates, for their counsel in developing the research design, data analysis, and reporting of the research results detailed in this report and in FinRegLab’s previous report, The Use of Cash-Flow Data in Underwriting Credit: Empirical Research Findings. We are also grateful to Tom Brown, Paul Hastings, for legal assistance throughout the course of the research process.

We would also like to thank the following individuals who provided feedback on this report. They include:

Joyce Klein

Director, Business Ownership Initiative

Jessica Milano

Member of the Board of Directors

Karen Mills

Harvard Business School

Annie V. Dand

Harvard Business School

We would also like to acknowledge the FinRegLab team who worked on this Spotlight report. They include:

Kelly Thompson Cochran

Deputy Director and Chief Program Officer

With Support From

Flourish Ventures

Flourish, a venture of the Omidyar Group, has provided operating support to FinRegLab since its inception. Flourish is an evergreen fund investing in entrepreneurs whose innovations help people achieve financial health and prosperity. Established in 2019, Flourish is funded by Pam and Pierre Omidyar. Pierre is the founder of eBay. Managed by a global team, Flourish makes impact-oriented investments in challenger banks, personal finance, insurtech, regtech, and other technologies that empower people and foster a fairer, more inclusive economy.

Milken Institute

The Milken Institute is a nonprofit, nonpartisan think tank that helps people build meaningful lives, in which they can experience health and well-being, pursue effective education and gainful employment, and access the resources required to create ever-expanding opportunities for themselves and their broader communities.

JPMorgan Chase & Co.

(NYSE: JPM) is a leading financial services firm based in the United States of America (“U.S.”), with operations worldwide. JPMorgan Chase had $3.9 trillion in assets and $313 billion in stockholders’ equity as of June 30, 2023. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers in the U.S., and many of the world’s most prominent corporate, institutional and government clients globally. Information about JPMorgan Chase & Co. is available at

The Rockefeller Foundation

The Rockefeller Foundation advances new frontiers of science, data, policy, and innovation to solve global challenges related to health, food, power, and economic mobility. As a science-driven philanthropy focused on building collaborative relationships with partners and grantees, The Rockefeller Foundation seeks to inspire and foster large-scale human impact that promotes the well-being of humanity throughout the world by identifying and accelerating breakthrough solutions, ideas, and conversations. For more information, visit

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    Records from consumers’ deposit and card accounts and from small businesses’ accounting software can provide a relatively detailed and comprehensive picture of how applicants manage their finances on an ongoing basis. FinRegLab conducted an empirical assessment of the data’s benefits and risks, as well as market and policy analyses of the challenges to its wider… Learn More


About FinregLab

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