Fintech companies and payment startups are focused on solving the problems facing small business banking and helping financial institutions modernize. If you’re a merchant on the lookout for the most reliable and cheapest small business lending, this article is right for you.
Small Business Lending: Invoice and Fintech
Small businesses account for growth and open up doors for innovation and new opportunities. Small business credit across the world became unproductive after the 2008 financial crisis. It hasn’t opened up until recently. Today, banks are often entering into partnerships with fintech companies to avoid competing.
In fact, fintech companies have brought a real revolution in the finance industry in more than one way. They’re working on doing even more. They promise to help you avoid entering your company info for each loan application each time you need financing. Also, they promise to keep you away from endless paperwork, especially with traditional banks.
Did you know that the number of SMBs using mobile apps to process payments and manage their payment cards is growing year over year?
When it comes to banks, with years, they started to give more approval to small business owners looking for loans. Specifically, in 2011, only 8.9% of small businesses were approved for a loan from a big bank. In 2018, that number reached 25.9%.
However, this doesn’t mean that banks already have all the tools to analyze and provide loans to small businesses in a proper way. For example, lots of banks require small businesses to have 2 years of official invoicing.
That’s where reputable alternative online lenders like First American Merchant step in. Working with a true business funding expert like FAM, you can enjoy the most secure, easy-to-get and cheapest small business lending.
As you see, modern fintech can really bring about striking opportunities such as affordable costs, enhanced financial products/services, etc. This can get regulators to create laws that can appropriately capture new technology and never stay behind the ever-evolving innovations in the field.
Fintech Modernizing the Lending Space
Small business owners are well aware that raising capital is now much easier than years ago. Traditional banks are now more willing to work with small businesses than previously. In fact, modern fintech startups are making online lending options expand.
However, in markets where you deal with higher levels of informality and bureaucracy in the banking sector, small businesses can’t expect to get approval for a formal loan in almost 100% of cases.
The great thing is that the growth of fintech funding isn’t going to end soon. According to the analysis by Hampleton Partners, a dealmaker in technology mergers and acquisitions, investors already consider enterprise financial services and integration, online financial services, enterprise financial software, as well as Software-as-a-Service (SaaS) risk management some of the most important areas.
To sum up, fintech is changing FIs (traditional financial institutions), including banks and investment companies. This refers both to mutual fund and hedge fund, venture capital firms (VCs) and private equity firms (PEs). More and more institutions could make take advantage of fintech so to provide better meet customer needs and optimize their overall financial system.