Since the start of the pandemic, doing business has been anything but easy. Fortunately, all signs now point toward recovery across most sectors of the economy.
The American economy is strong, growing nearly 6% over the last year — the most significant annual increase it has seen since the early 1980s. As a result, business is booming, and small businesses need money to keep up with customer demand.
Demand for commercial and industrial loans increased near the end of 2021, signaling that businesses were not expecting a drop in consumer spending despite historical inflation. Instead, companies expect continued consumer spending and economic growth. They’re seeking ways to invest in their businesses to rebuild inventory and deal with supply chain issues that were prevalent in 2021.
These businesses aren’t just turning to traditional forms of commercial lending. During the same period, lenders reported an increase in business client inquiries about lines of credit and credit cards as funding sources. They need access to funding to ensure that they have available inventory to meet customer demand and invest in equipment and deal-making to grow the business.
A 2016 McKinsey report on Fintech in the banking industry highlighted how technology disruptors were making gains in what used to be a traditionally resistant sector. Less than half of small businesses are able to meet their financing needs, and a significant number of them don’t receive the funding they need even if they’re approved for a loan. Compared to traditional banks, Fintech disruptors can be more nimble and responsive to the needs of their customers.
This has not gone unnoticed by the big banks, many of whom are considering ways to give small businesses more access to money. Alternative underwriting is on the rise as more commercial lenders accept non-traditional data points like social media counts, credit card transactions, and business banking histories to evaluate applicants applying for a business loan. It’s a good move for businesses, but it doesn’t eliminate cumbersome policies and corporate bureaucracies that interfere with a company’s ability to get a loan.
Still, banks and credit unions are the first lenders businesses consider when they need funding to expand the business, purchase inventory, or increase cash flow. The products they offer include the following:
To qualify for these products, the businesses typically must demonstrate how long they’ve been in business and meet revenue and credit score requirements. While this is a viable option for businesses that meet the lender’s criteria, they have to go through a lengthy approval process that can potentially slow down operations on both sides of the transaction.
When you partner with Loanspark, you give your customers an alternative lending option. Instead of interrupting the transaction to finance the purchase, they can have access to business funding when they place an order. Compared to big banks and commercial lenders, Loanspark has more flexibility to approve applications and can complete the entire loan process faster. Your customer gets the money they need. You score the sale and generate an additional income stream.
Best of all, Loanspark handles all of the details. You don’t have to worry about licensing, compliance, technology, or support. Find out how you can offer your customers an exciting business lending program and discover why everyone needs Loanspark.