Fintech, short for financial technology, has seen immense growth over the past year. As a dynamic industry for startups, fintech has been changing the way we think about personal and business finance, payments, and investing. Companies in the fintech industry offer an alternative to traditional banking and financial services. These brands are making it easier for individuals and business owners to borrow money, make payments, and manage funds.
Now, you may be thinking how does fintech impact the business world? There are many ways that fintech companies are changing the way that business owners borrow money and manage their finances. Here are just 5 ways that businesses can benefit from fintech:
- Fintech companies are often more flexible in their lending.
Some business owners who have a less than stellar personal credit history may have a hard time obtaining a loan from a traditional lender. Similarly, business owners and entrepreneurs who have not been in business very long may also face difficulties while trying to borrow from a traditional lender. However, fintech companies are often more flexible in their lending because they take more than just personal credit history into consideration when making a loan decision. Using technology, these alternative lenders can get a more comprehensive idea of business health by accessing real-time business data from online business accounts. This allows them to be more flexible in who they can offer loans and business lines of credit to.
- Business owners have convenient access to funds.
Fintech companies make it easy for business owners to get the capital they need by offering convenient online access to funding. Most alternative lenders will offer direct deposit of loan funds or an online business line of credit, which business owners can draw from whenever they need to. Instead of having to wait several days or weeks to get the funds they need, business owners can easily and quickly access loan funds online and start putting their funding to use sooner rather than later.
- Fintech also provides more options for lending.
Many small business owners and entrepreneurs only need a small amount of funding to get started or meet their immediate business needs. Unfortunately, many traditional lenders are not able to accommodate these unique needs because their funding platform has been created for larger businesses who need to borrow greater amounts of money. Fintech provides more options for lending that can often better meet the needs of small businesses and startups. Alternative lenders can offer small business owners and entrepreneurs more flexible funding options such as smaller loan amounts or an online business line of credit. This helps ensure that business owners are not borrowing more than they need, but they are still able to access the necessary funds to start or grow their business.
- Fintech companies offer quick credit decisions.
For many years, the business loan process involved a large amount of paperwork and often several weeks would pass between the application submission, the loan decision, and the funding of the loan. Using the technology available to them, alternative lenders in the fintech industry have created a much faster process that significantly cuts down time between the application submission and credit decision. Business owners can now apply for loans entirely online and get a decision in a matter of minutes. Not to mention, most alternative lenders offer a faster funding process where the loan funds are then deposited into the business bank account or provided through an online business line of credit within 24 to 48 hours. This faster decision and funding process allows business owners to get their money faster and start putting it to use immediately.
- Business owners can enjoy improved customer service.
Fintech companies are also finding new ways to improve the customer service experience for business owners that need to borrow. In fact, part of the reason that fintech companies emerged was due to the need for a better customer service experience within the finance industry. Business owners benefit from fintech by enjoying a convenient lending process and access to funds, making it easier for businesses to get the money they need when they need it. The entire borrowing process is designed with the consumer in mind, so business owners enjoy a positive and convenient experience every step of the way.
No matter which way you look at it, fintech is presenting a variety of possibilities for small business owners and entrepreneurs who are looking to start or grow their business. From a more convenient application process to more flexibility in the loan decision, fintech companies are changing the way business owners borrow by opening up new opportunities for small business owners and entrepreneurs who may not have other options for funding their start-up.