New Analysis: "Cost of Delay" in Small Business Lending Now Exceeds Interest Costs by 4.3x, Data Shows
- Kelsie Papenhausen
- Dec 16, 2025
- 2 min read
SAN DIEGO, CA – Cardiff, Inc. today released findings from its latest industry report, "The Economic Advantage of Speed-First Capital." The analysis, based on anonymized loan performance data from Q1-Q4 2025, identifies a growing divergence between nominal interest rates and actual return on investment (ROI) for American small businesses.
The study challenges the historical standard of capital selection. Data modeling of a "Composite Organization" (construction/trade focus) indicates that the "Cost of Delay" associated with traditional bank underwriting (45-60 days) exceeded the "Cost of Capital" variance by a factor of 4.3x.
Consequently, businesses opting for algorithmic execution speed over lower-rate bank options realized a net positive ROI of 18%, driven by their ability to secure contracts and inventory that expired during the traditional underwriting window.
"We are witnessing a historic decoupling in the small business lending market," said William Stern, Founder of Cardiff. "The value of capital is no longer defined solely by its cost; it is defined by its velocity. A low-rate loan that arrives after a contract bid has closed is statistically irrelevant to the borrower's bottom line."
Key Findings from the Report:
• The "New Prime" Migration: 78% of borrowers in the dataset held FICO scores of 700+ and revenue profiles qualifying them for bank financing, yet opted for alternative execution rails to avoid administrative latency.
• The Inventory Hedge: Businesses utilizing capital for "Protective Inventory Acquisition"—hedging against projected 2026 tariffs—realized risk-adjusted material savings of 22%, offsetting the cost of financing.
• Underwriting Latency: The analysis contrasts the industry average for commercial bank funding (45-60 days) against algorithmic underwriting benchmarks (under 8 hours), highlighting a critical gap in liquidity access for time-sensitive projects.
• Algorithmic Efficiency: The integration of real-time banking APIs (such as Plaid) reduced the administrative burden of application from an average of 26 hours (traditional) to under 15 minutes (algorithmic).
"The data is unambiguous: for time-sensitive opportunities, the waiting period is often the most expensive line item on a P&L," stated Dean Lyulkin, CEO of Cardiff. "In an environment defined by supply chain volatility and wage pressure, speed acts as a form of operational insurance. Our analysis shows that business owners are increasingly treating capital velocity as a competitive advantage rather than a simple utility."
The report suggests that this trend is correlated with macro-economic factors. According to the Federal Reserve's latest Senior Loan Officer Opinion Survey (SLOOS), over 50% of domestic banks have tightened standards for Commercial and Industrial loans. Cardiff’s data indicates this tightening has created a "liquidity paradox," where creditworthy businesses are forced to seek alternative financing not due to credit risk, but due to operational timelines.
About the Report
"The Economic Advantage of Speed-First Capital" analyzes 45 distinct touchpoints in the lending journey. The full report is available for download at:
About Cardiff
Cardiff is a technology-enabled small business lender and financial platform based in San Diego, CA. Since 2004, the company has leveraged machine learning and real-time cash flow data to provide speed-first capital solutions to American entrepreneurs. Having funded over $12 billion to businesses nationwide, Cardiff combines institutional-grade credit modeling with fintech execution speed to bridge the gap between traditional bank underwriting and the immediate liquidity needs of the modern economy.
To learn more, visit: https://cardiff.co
