Banking Small Business

Loan demand, which bankers say remained weak well after the recession, is picking up, and the industry is adjusting business models to meet it. But banks may want to act fast.

Racial disparity in small-business loans remains glaring, despite some improvement. Lenders' unfamiliarity with African-American communities is part of the problem, but so is the need for financial education among prospective borrowers.

Some startups have been criticized for charging high fees and interest rates, but online lenders argue that borrowers are willing to pay them for the sake of expediency.

Leaders of smaller banks optimistic about the growth prospects of small-business loans in 2015, but they are equally worried about increased competition from larger banks, nonbanks and credit unions.