Small and medium size business may still be the economic heart of the U.S. economy, but they're in need of much-needed oxygenated cash. It's hard to be an SMB and in the wake of the 2007 economic crisis, small businesses are finding it harder than ever to borrow money. Smaller banks were always more likely to lend to small businesses, but they're getting gobbled up by the larger players. Online players are making a dent, albeit a small one. No rose-colored glasses for SMBs It's no wonder that SMBs aren't optimistic about their futures. The median SMB holds 27 buffer days of cash in reserve, according to the JPMorgan Chase and Co. Institute. And when they look to access small working capital loans to improve their cash flows, they aren't finding a lot of lenders willing to work with them. Can you help a brother out? It's not like the average SMB has a major appetite for cash, either. 76 percent of loans that SMBs apply for are less than $250,000 and amost half of them are under $50,000, according to a paper co-written by authors at the Harvard Business School and business loan marketplace, Fundera. While there are more choices for businesses looking for cash, traditional lending hasn't closed the gap in small business lending. More opportunities to borrow online, but there's a catch While traditional lending hasn't stepped up to fill this small business lending gap, alternatives have sprouted up. As more SMBs turn to online lenders, they're not always coming back happy. That's mostly due to the high costs of some of these early loans. "Replicating the value of the lending relationship in creating a good customer/ product fit between the borrower and the loan they take out is currently a critical challenge for the new online entrants," HBS and Fundera wrote in The State of Small Business Lending: Innovation and Technology and the Implications. Online and alternative lending is growing The demand from SMBs is still strong and they're increasingly going online to access capital. Approximately one-in-six small businesses considering a loan will apply to an online lender this year. But because there's a lack of data collection on overall loan originations in the U.S., it's tough to accurately size the effect of new entrants in the SMB lending space. The HBS/Fundera research estimated that annual online lending originations in 2015 were around $5 billion, growing 120-150 percent year over year. As 2016 numbers begin to trickle in, it will be interested to see how balance sheet lenders, like OnDeck and CAN Capital, grew relative to marketplace lenders, like Lending Club and Prosper, which had their own struggles during the year.