The distance between small firms and their lenders in the United States has increased over time. Firms are not only choosing more distant lenders but also communicating with them in more impersonal ways. This trend is not due to changes in firm locations, banking industry consolidation, or sample selection biases, but rather appears to be correlated with improvements in bank productivity. The availability of borrower credit records and the ease of processing these records have increased, allowing lenders to obtain timely information. As a result, distant firms no longer need to be the highest quality credits, suggesting that a wider range of firms can now access financing. These findings indicate that the financial sector in the U.S. has developed significantly, even in areas like small business lending not directly influenced by public markets. From a policy perspective, this suggests that the consolidation of banking services may not raise as strong anti-trust concerns as in the past. Small business lending has historically been costly due to limited information about small firms and the high costs of obtaining that information. However, there has been a trend of small businesses becoming more distant from their lenders. This is evident in two ways: first, borrowers are physically more distant from lenders, and second, the method of transacting business has shifted from personal contact to using the phone or mail. The increase in distance is strongly correlated with measures of bank productivity, suggesting that reductions in the cost of gathering and analyzing information may explain the results. The availability of information about credit history has changed the nature of lending, allowing lenders to make decisions based on timely information. This reduces information asymmetries and enables lenders to react quickly to unanticipated contingencies. The findings suggest that the financial sector has evolved significantly, with technology playing a key role. The implications of this evolution include increased access to financing for small businesses, which can lead to more competition, greater efficiency, and growth. The evidence also suggests that institutional lending has benefited from the availability of information, enabling institutions to lend to riskier clients. The findings have policy implications, suggesting that anti-trust policy should consider the expansion in competition due to technological changes. The evidence also supports the idea that information technology increases productivity in the financial sector.The distance between small firms and their lenders in the United States has increased over time. Firms are not only choosing more distant lenders but also communicating with them in more impersonal ways. This trend is not due to changes in firm locations, banking industry consolidation, or sample selection biases, but rather appears to be correlated with improvements in bank productivity. The availability of borrower credit records and the ease of processing these records have increased, allowing lenders to obtain timely information. As a result, distant firms no longer need to be the highest quality credits, suggesting that a wider range of firms can now access financing. These findings indicate that the financial sector in the U.S. has developed significantly, even in areas like small business lending not directly influenced by public markets. From a policy perspective, this suggests that the consolidation of banking services may not raise as strong anti-trust concerns as in the past. Small business lending has historically been costly due to limited information about small firms and the high costs of obtaining that information. However, there has been a trend of small businesses becoming more distant from their lenders. This is evident in two ways: first, borrowers are physically more distant from lenders, and second, the method of transacting business has shifted from personal contact to using the phone or mail. The increase in distance is strongly correlated with measures of bank productivity, suggesting that reductions in the cost of gathering and analyzing information may explain the results. The availability of information about credit history has changed the nature of lending, allowing lenders to make decisions based on timely information. This reduces information asymmetries and enables lenders to react quickly to unanticipated contingencies. The findings suggest that the financial sector has evolved significantly, with technology playing a key role. The implications of this evolution include increased access to financing for small businesses, which can lead to more competition, greater efficiency, and growth. The evidence also suggests that institutional lending has benefited from the availability of information, enabling institutions to lend to riskier clients. The findings have policy implications, suggesting that anti-trust policy should consider the expansion in competition due to technological changes. The evidence also supports the idea that information technology increases productivity in the financial sector.