Every number you trust about the economy started as a decision about what to count.
Somebody drew the boundaries. Somebody decided which transactions get a row in the spreadsheet and which ones never show up at all.
Every so often that boundary moves. The picture you rely on changes shape without changing its name, and you keep reading it the same way.
That is what just happened to small-business credit, and outside the lending industry, almost nobody noticed.
Why small-business lending data has stayed missing for 16 years
Section 1071 of the Dodd-Frank Act told lenders to collect and report data on credit applications from small, women-owned, and minority-owned businesses, according to the Federal Register notice for the current rule.
Congress passed that in 2010. Sixteen years later, not one data point has been collected, and the 2023 attempt to start died in litigation across three jurisdictions.
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Then the rules changed. The Consumer Financial Protection Bureau published a revised version on May 1 that took effect June 30, and it is a far smaller rule than the one it replaced.
Merchant cash advances are now excluded. So is agricultural lending, and so is any business loan of $1,000 or less.
A merchant cash advance is defined in the rule as an arrangement whereby a small business takes a lump sum and hands over a slice of its future sales until a ceiling amount is repaid.
If you have ever seen a pitch promising same-day funding with no fixed monthly payment, that is the product.
What the new small-business lending rule leaves out
The exclusions matter less than the arithmetic around them, and the arithmetic is where I spent my time.
Here is what changed alongside the product carve-outs:
- The origination threshold rose from 100 covered transactions to 1,000, the Federal Register notice indicated.
- The small-business definition tightened from $5 million in gross annual revenue to $1 million, according to the CFPB.
- Pricing information and denial reasons were both cut from the required data, the CFPB added.
- Roughly 31 non-depository institutions will end up covered, under two percent of that market, according to the National Community Reinvestment Coalition.
- Lenders start collecting Jan. 1, 2028, with the first reports due June 1, 2029, the Federal Register notice confirmed.
The Bureau’s defense is a coverage number. The revised rule still captures 92% to 93% of small business loans, against 94% to 95% under the 2023 version, based on its own estimate in the rule.
Read that estimate closely, and you find the qualifier: It describes lending by depository institutions — banks and credit unions.
When I ran that against the market itself, the gap opened up. Non-depository lenders were around 39% of the small business lending market as of 2019, according to the National Community Reinvestment Coalition, and the revised rule reaches almost none of them.
So a coverage rate that sounds close to complete describes one half of the market, while the other half goes unmeasured.
Why a civil rights coalition is still in court
Rise Economy, the National Community Reinvestment Coalition, Main Street Alliance, and Iowa business owner ReShonda Young sued the Bureau and Acting Director Russell Vought in Washington federal court in July 2025, represented by Democracy Forward.
“We are suing to make them adhere to the law,” said Jesse Van Tol, the coalition’s chief executive, in a statement carried by Rise Economy.
That case attacks the delay and non-enforcement that came before this rule, not the rule itself, and it was still pending at last check.
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Industry read it as a win. The final rule is “an important step in the right direction,” the Revenue Based Finance Coalition said in a statement published by deBanked.
The legal wrinkle underneath all of it is stranger than either side’s framing. The Bureau walked away from its 2023 position that merchant cash advances are credit under the Equal Credit Opportunity Act, but it refused to say they are not credit either, according to Goodwin.
In the rule itself, the Bureau conceded that in some cases these deals “involve debt, confer a right to payment, and are loans.” It also noted that providers sometimes pursue the individual owners of a business that has run out of revenue.
What the small-business data gap means for your read on credit stress
Start with where small businesses actually go for money. Applications at online fintech lenders climbed from 17% of applicants in the 2020 survey to 29% in the 2025 survey, according to the Federal Reserve’s 2026 Report on Employer Firms.
Six in 10 firms that borrowed from an online lender said the cost came in higher than they expected.
That is the channel growing fastest and pricing hardest, and it is the channel that will not appear in the federal data.
Meanwhile, the consumer side of the ledger is fully visible. Household debt hit $18.8 trillion in the first quarter, with 4.8% of balances in some stage of delinquency, and student loan balances 90 days or more past due rose to 10.3% from 9.6%, according to the Federal Reserve Bank of New York.
You will keep getting quarterly updates on your credit card and your car note. You will get nothing comparable on the financing your neighbor used to keep her restaurant open.
For now, the practical move is state-level. Several states require sales-based financing providers to disclose the total cost of capital and a financing rate, and those disclosures are the only pricing transparency this product carries.
Ask for that number in writing, and read the recourse language before you sign anything that reaches past the business.
The Bureau says it will keep watching the market and may fold some of these advances back in later.
It also pushed the decision on releasing the data publicly into a future rulemaking that starts after the first year of collection, which puts any public file at 2029 at the earliest. Nineteen years after Congress asked for it.
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