Small businesses are the pride of local economies. But sometimes SMEs (small to medium enterprises) need extra funding to help them thrive. For many businesses, small business lending is a vital key to success.
But business finance wasn’t always as readily available as it is today. Technology is the catalyst that has transformed the world of small business lending, making funds more accessible than ever for aspiring businesses.
So what role has technology played in transforming business finance options?
Trustworthy Finance Providers Are Now at Business’ Fingertips
Previously, businesses who needed financial help would only have banks and a few alternative finance providers to turn to. These businesses largely relied on word-of-mouth recommendations and gut-instinct to find the best lender.
Now, businesses can look for finance providers in their area with a simple Google search. Within seconds, businesses can have hundreds of providers at their fingertips, from banks to investors to alternative finance providers.
Technology Has Streamlined Application Processes
Applying for finance used to involve several journeys to banks to exchange documents and have face-to-face meetings with bank managers and consultants.
But nowadays businesses can apply for business finance online, without spending time traveling to and from banks or lenders’ offices.
Most finance providers will use technology to make their application process as smooth and fast as possible. Business bank loan applications can still be a little lengthy. However, many alternative finance providers use technology to digitize the entire application process, ensuring applications are completed as fast as possible — in some cases within a few days.
SMEs Have (Almost) Lightning Fast Access to Funds
Businesses can also speed through the approval process as finance providers can quickly review applications. With information and documents sent electronically, lenders can review the application almost immediately. Even credit checks can be performed online in a matter of moments. So once businesses have applied for finance, their application is usually approved or declined within a few days.
Funds are then transferred instantly to the business via direct bank transfer. Or, if the business is using an alternative finance solution such as supplier finance, the funds may be paid directly to the business’ supplier.
As well as saving time on back-and-forth communications, fast access to funds means businesses can seize time-sensitive opportunities. They can also prevent cash flow issues from disrupting business operations.
With Technology Comes the Freedom of Flexibility
Business loans and finance solutions used to involve a lot of manual organization by the business and the finance provider. Now though, technology has improved communication and digitized data organization and storage. As a result, there’s more flexibility in finance solutions.
Requests to change finance agreements can quickly be submitted and — at the lender’s end — contract details easily amended. So more lenders, especially alternative finance providers, are offering flexible finance products. For example, businesses who work with a finance provider to receive cash advances on unpaid invoices may have the freedom to finance more or fewer invoices as and when needed.