Noah Breslow says the change he has observed in the Australian online SME lending market over the past few years is that small business owners used to approach an online lender after they had been rejected by a bank, but now more of them are choosing online lending first.Breslow is the chief executive of lender OnDeck, which launched in the US in 2007 and has written US$10 billion of small business loans since then.The company launched in Australia in 2015 and, while Breslow won't say how much business the local outfit has done, it "has met every expectation".Breslow was in Sydney this week to speak at the AltFi Summit. He presented research which shows that one in four small businesses have been knocked back by a bank when applying for finance.Among those that have secured bank finance, 29 per cent say their businesses were "negatively impacted" by the time taken to organise the loan.Breslow says what is drawing borrowers to companies like OnDeck as a first option is the speed and convenience of dealing with an online bank. "We can assess an application in a day and fund in a few days," he says.OnDeck's research shows that 22 per cent of small business owners would consider an online lender.He says the big banks are responding by changing their processes to speed up approvals but they will not change their risk appetite.Breslow's view that more small businesses are choosing online lenders first is supported by the findings of the latest Scottish Pacific SME Growth Index, which says the number of SMEs that turn to their main bank to fund growth has dropped below 20 per cent. SMEs are about as likely to turn to an alternative lender as they are to ask their main bank to fund growth, according to the survey.Scottish Pacific chief executive Peter Langham said the reasons behind this trend included banks' tightening credit criteria, greater flexibility offered by alternative lenders and SME owners' dislike of having to use their property as security for business loans.