Small businesses are the backbone of our nation’s economy – producing trillions in gross domestic product each and every year.
And, lending has long been a key aspect of small businesses…
Most entrepreneurs don’t have the resources to fund a new business themselves, so they go looking for investors or small business loans. When you think small business loan, you likely think of a brick-and-mortar bank…
An entrepreneur walking into a local branch with their briefcase in hand and a detailed business plan that lists out their target audience, their product or service, marketing tactics and just about everything in between. They step into the office of a loan officer and discuss their options – hoping to secure funding for their business venture.
However, in 1994, in a Newsweek interview, Bill Gates, Microsoft co-founder, said something interesting that we have now seen come true over the past two decades. “Retail banks are dinosaurs, they can be bypassed,” Gates said. But, you are probably wondering just how this could be possible.
Well, of course, small business owners still need funding, but, thanks to technology the topic of small business lending has evolved and Bill Gates might just have predicted it.
How is technology changing the world of small business lending?
If you like to keep things traditional, you can still go to a local bank and secure a small business loan. But, if you are looking for a quicker, easier, or even more affordable option, some of the newer ways to secure small business funds might be for you:
From crowdsourcing to online investors – technology has added a plethora of options to your plate.
And, just what are the benefits of these?
Benefits of How Technology Has Changed Small Business Lending
You can locate a lender with the click of a button.
Thanks to search engines like Google, simply type in a quick description of what you are looking for, hit “enter,” and in a matter of seconds, you can be evaluating your options.No more driving all around town trying to determine who you should use. A few online sites where you can locate a lender with just a few clicks include Consumer Reviews or TrustPilot.
You can secure a small business loan online.
Forget dressing up in your Sunday best and carrying your favorite briefcase into your local bank. Thanks to constantly evolving technology and server monitoring, you can secure your loan right from the comfort of your home – even in your pajamas, if you’d like.
Some of the online business loan lenders have a higher origination fee, and some might have a higher interest rate. However, you might find that it is easier to qualify for and some of the normal regulations might be more relaxed.
In addition, the application process will be much less gruesome, which leads us to our next benefit.
The application process is simplified.
Thanks to technology, business owners can now pull tax information straight from tax filing, saving hours. No more scrolling or sorting through every piece of paper related to your business. For most places, you can simply autofill your information and upload a scan of your cash flow documents or other paperwork right from your computer. So, if you lost the paper copy but still have a digital one – no worries whatsoever.Using technology, online lenders have simplified the application process so much so that you will know no difference between your loan application and filling out an online survey for your favorite restaurant.
They offer a more creative approval process.
One of the major ways that technology has changed small business lending comes in the approval process. Using data-driven algorithms and other new and improved methods, online lenders can quickly assess your creditworthiness and eligibility – offering you an incredibly fast approval.This can also help make it easier to qualify for a loan, considering all aspects of your finances are taken into consideration in new and improved ways.
It is easier than ever to stay connected.
Aside from the new and improved approval process, being able to stay in touch with your lender via email or online chat makes it much quicker and easier to address any questions or concerns. No more being forced to wait in line at the branch or on hold on the phone – shoot them a quick email, at your convenience. This also helps eliminate the need for face-to-face meetings.
It is no secret that technology has revolutionized just about every aspect of our lives – from the way we make our grocery list to how and where we shop online. So, when it comes to small business lending, you can easily benefit from the changes technology has to offer, from getting a loan funded online to being approved in a matter of minutes.
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