They gave her business a lifeline, then froze all her money

Connecticut has granted unusual regulatory power to a murky corner of the financial world that has become the fastest-growing funding source for small businesses. The state's permissive framework enabled these lenders to provide capital to entrepreneurs, but at least one business owner experienced her account frozen after receiving funding. The situation has prompted potential regulatory changes in Connecticut. The case illustrates risks posed by the largely unregulated sector's expansion into small-business lending.