Many of the nation's less-creditworthy small businesses are falling into the open arms of online lenders. And while most of these applicants are getting approved, few of them come away happy.

Those are among the key findings of an extensive new survey by seven regional Federal Reserve banks. More than 3,400 small businesses of various sizes participated in the survey, which adds to the mounting evidence that online lenders have become an important financing source for firms with less than $1 million in annual revenue, as banks have retreated from that market.

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