An 18-year-old alternative lender just hit a milestone that most banks never reach in small business lending, and the growth metrics behind it reveal where this market is heading in 2026.

On March 2, 2026, Fora Financial announced it has surpassed $5 billion in total capital provided to more than 55,000 American businesses since its founding in 2008. The New York-based lender reported a record-breaking 2025: origination volume grew 17.1% year over year, portfolio size expanded 25.6%, and December 2025 marked the highest single-month funding volume in company history.¹

The backstory: Jared Feldman and Dan Smith founded Fora Financial as college roommates in 2008, entering the market during the financial crisis when traditional banks pulled back from small business lending. The company has operated profitably across multiple credit cycles, building a direct lending operation focused on working capital products for SMBs with $100K to $50M in annual revenue.²

The growth drivers: Three metrics stand out from the 2025 performance data:

Looking ahead: For 2026, CEO Jared Feldman outlined three investment priorities: expanded online checkout capabilities to streamline the borrower application experience, AI-driven underwriting enhancements, and a new partner platform designed to serve ISOs and strategic lending partners. Feldman stated: "Reaching $5 billion in funding is a testament to the trust business owners place in Fora Financial and the strength of our platform."¹

The number itself is significant, but the trajectory matters more. Fora Financial did not accumulate $5 billion at a steady rate. The company's 2025 performance, with 17.1% origination growth and Q4 setting an all-time monthly record, means the recent pace has accelerated. That acceleration pattern is consistent across the MCA industry. LendingTree reported on its Q4 2025 earnings call that small business revenue grew 78% year over year, with CFO Jason Bengel stating directly: "The merchant cash advance market is a strong market that is growing."¹⁴

For context, Fora Financial has operated across the 2008 financial crisis, post-crisis recovery, COVID disruption, the 2022-2024 rate hiking cycle, and now a high-rate plateau. The company has been profitable throughout, which is a statement about the durability of the short-term SMB lending model. Lenders that survive multiple cycles build institutional knowledge about borrower behavior that pure-play fintech startups cannot replicate in two years of operations.

The $5 billion figure also positions Fora Financial in a tier of alternative lenders that can credibly attract institutional capital. At this scale, private credit funds, CLO managers, and specialty finance acquirers take notice. Whether Fora pursues a capital markets transaction, a private equity partnership, or continues on its current trajectory, the milestone changes the conversation about what the company is worth.

Federal funds rate sat at 4.25% to 4.50% through the back half of 2025, and Treasury yields stayed elevated. For traditional bank lenders, higher rates compressed margins and slowed loan demand. For alternative lenders, the dynamic is different.

SMBs that need working capital in 30 days are not comparison shopping for basis points. They need capital to cover payroll, purchase inventory, or bridge a receivable gap. The cost of capital for a Fora Financial product has always been higher than a bank line of credit, and borrowers know that going in. What matters is speed, approval probability, and the ability to fund when banks cannot or will not.

The 20% increase in average monthly funding volume from underwriting technology is the more revealing data point. That means Fora processed more volume per unit of operational cost, likely through automated data ingestion, faster decisioning models, and streamlined document review. When your underwriting tech lets you say yes faster without adding headcount, you capture deals that competitors lose to processing delays. In MCA, 24 hours of lag costs you the deal.

The FDIC's Q4 2025 Quarterly Banking Profile offers additional context: U.S. bank lending grew at a 5.9% annual rate (the fastest in 11 quarters), but delinquency rates climbed to 1.56%, and problem banks rose to 60.¹⁵ Rising delinquencies in traditional portfolios often push riskier borrowers toward non-bank options, expanding the addressable market for companies like Fora.

The 225% year-over-year increase in strategic partner channel funded volume is the single most important number in the announcement. It signals a deliberate shift in distribution strategy.

Historically, Fora Financial built its business through direct origination: marketing, lead generation, and an in-house sales operation. The partner channel (ISOs, brokers, fintech platforms, and embedded lending partners) represents a fundamentally different growth model. Instead of paying to acquire each borrower directly, you build a platform that other distribution partners plug into.

The economics are compelling. Direct acquisition costs for an SMB loan typically run $500 to $2,000 per funded deal depending on channel and vertical. Partner channel deals shift that cost to the ISO or broker, who takes a commission on funded volume. For the lender, the margin per deal may be slightly lower, but the volume scalability is dramatically higher because you are leveraging other people's sales infrastructure.

Fora's planned 2026 investment in a "new partner platform" confirms this is not a one-year experiment. They are building dedicated technology to serve ISOs and strategic partners, which means API integrations, white-label capabilities, real-time deal tracking, and automated commission management. If executed well, this turns Fora from a lender into a lending platform, and platforms command higher valuations than single-channel originators.

The short answer: because it is already working. The 20% increase in average monthly funding volume was attributed directly to enhanced underwriting technology. That is not a projection; it is a trailing indicator.

AI-driven underwriting in alternative lending typically focuses on three areas:

The timing also matters. American Banker reported in March 2026 that fintech SMB lenders are adjusting underwriting models to account for tariff-related risk, with Kapitus COO Ben Johnston noting that lenders are "forced to lend more conservatively, reducing overall offer size and increasing price."¹³ AI models can adapt to shifting risk environments faster than manual underwriting committees. When tariffs reshape borrower cash flows overnight, the lender with the most responsive decisioning model wins.

The 15% increase in average funding volume for repeat customers is a metric that deserves more attention than it typically gets.

In alternative lending, the first deal proves the model: the borrower needed capital, you provided it, and they performed on their obligation. The second deal is where unit economics improve dramatically. Acquisition cost drops to near zero (the borrower is already in your system), underwriting is faster (you have performance history), and default risk is lower (you have observed their repayment behavior under real conditions).

A 15% increase in average funding volume for returning borrowers means two things. First, borrowers are growing their businesses and need more capital, which validates that the initial financing was productive rather than extractive. Second, Fora has the risk appetite and balance sheet capacity to extend larger amounts to proven performers, which means they are managing portfolio concentration effectively.

Customer lifetime value is the metric that separates lenders who build durable franchises from those who churn through borrowers. If your average customer completes three funding cycles over five years, with each cycle 15% larger than the last, your revenue per acquired customer compounds significantly. That is how you reach $5 billion without proportionally scaling your marketing budget.

Fora Financial's milestone arrives alongside several data points that suggest the alternative lending market is entering a new phase of institutional maturity.

PitchBook reported that fintech venture capital hit $42.8 billion globally in 2025, with lending and credit infrastructure capturing a significant share of that investment.¹¹ Proskauer's 2026 Private Credit Survey found that institutional allocators are increasingly evaluating alternative lending platforms as investable asset classes, drawn by yields that exceed traditional fixed income by 400 to 800 basis points.⁸

On the blockchain side, two recent developments signal where capital markets innovation is heading. Apollo partnered with Morpho to explore DeFi lending rails for institutional credit products.⁹ Newity raised $11 million to build onchain SBA lending infrastructure.¹⁰ Neither of these directly affects Fora Financial's operations today, but they indicate that institutional capital is finding increasingly creative ways to reach small business borrowers, which expands the funding pool available to alternative lenders.

Meanwhile, regulatory pressure continues to reshape the competitive landscape. The Trigger Leads Law (H.R. 2808) took effect on March 4, 2026, banning credit bureaus from selling mortgage trigger lead data to unaffiliated third parties.⁶ While narrowly scoped to residential mortgages, the precedent could expand to commercial lending leads. And NJ Citizen Action is actively pushing for a federal interest rate cap, which would fundamentally restructure alternative lending pricing if enacted.¹²

Any contract signed under that name has no legal backing.

Most teams also miss that NY distinguishes between "Merged" and "Consolidated," which affect which surviving entity holds your obligations.

Cobalt's SOS API flags Annulled entities in real time before your wire hits.

Schedule a FREE demo call

The Homebuyers Privacy Protection Act (H.R. 2808), signed September 2025, officially took effect March 4, 2026, banning credit bureaus from selling mortgage trigger lead data to unaffiliated lenders. While scoped to residential mortgages, the legislative model is significant: Congress blocked third-party data sales from credit pulls with bipartisan support after seven years of industry advocacy. LendingTree CEO Scott Peyree noted on Q4 earnings that the law eliminates practices where "bureaus sell information to unaffiliated third parties." For alt lenders, the precedent matters. If this model expands to commercial lending triggers, prospecting strategies built on credit bureau data face disruption. Action item: audit lead vendors for compliance and invest in first-party data channels.

Proskauer's annual survey confirms that institutional allocators continue increasing exposure to private credit, with alternative lending platforms drawing particular interest due to yield premiums of 400 to 800 basis points over traditional fixed income. The survey highlights growing comfort with SMB lending as an asset class, driven by improved data transparency and platform-level risk management. For alternative lenders seeking warehouse lines or institutional capital partnerships, the window of favorable capital availability remains open, but competition for allocator attention is intensifying as more platforms enter the market.

Apollo, one of the largest alternative asset managers globally, partnered with Morpho, a decentralized lending protocol, to explore using DeFi rails for institutional credit products. The deal signals that traditional private credit firms see blockchain infrastructure as a potential efficiency layer for loan origination, settlement, and secondary trading. This is not about replacing traditional lending; it is about reducing the friction and cost of moving capital from institutional allocators to borrowers. For alt lenders, this development matters because cheaper capital markets infrastructure eventually means more competition for borrower attention as new funding sources come online.

Newity closed an $11 million round to build blockchain-based infrastructure for SBA lending, targeting the inefficiencies in government-backed loan origination and servicing. The company aims to tokenize SBA loan pools for secondary market trading, which could improve liquidity and reduce the cost of capital for SBA lenders. While SBA lending is a different product from MCA or revenue-based financing, the underlying technology for onchain loan management, automated compliance tracking, and tokenized secondary markets is transferable. This is an early signal of where lending infrastructure is heading over the next three to five years.

Global fintech venture capital investment reached $42.8 billion in 2025, according to PitchBook, with lending and credit infrastructure capturing a meaningful share of total deployment. The rebound from 2023's trough signals renewed investor confidence in fintech business models, particularly those with proven unit economics and clear paths to profitability. For alternative lenders, the VC environment matters because well-funded fintech competitors can afford to price aggressively, invest in technology, and absorb losses during market entry. The flip side: VC capital also flows to infrastructure providers (BaaS, underwriting APIs, compliance tools) that make it cheaper for established lenders to operate.

New Jersey Citizen Action is actively lobbying for a federal interest rate cap on consumer and commercial lending products, joining a coalition of consumer advocacy groups that argue current state-by-state regulation creates enforcement gaps. A federal cap, if enacted, would fundamentally restructure pricing for MCA, revenue-based financing, and high-yield consumer lending products. The probability of passage in the current Congress remains low, but the advocacy campaign builds infrastructure for future legislative attempts. Alt lenders should monitor this as a long-tail regulatory risk and ensure their pricing and product structures could withstand a 36% APR ceiling if it ever materializes.