Important Information to Share With Your Clients: The Future of Small Business Finance
According to the latest figures available, more than half of U.S. adults conduct online banking and more than one-third conduct business via their mobile devices. You can pay bills, transfer money and, increasingly, apply for loans from a tablet or mobile device.
Despite the numbers, many of the nation's financial institutions are behind the times when it comes to online banking. Surprisingly, small banks, credit unions, and even some of the nation's largest banks have not invested in the technology to accept online small business loan applications. With greater competition from online marketplace lending platforms, traditional lenders have ceded market share to competitors such as institutional investors that are making credit available on platforms such as Biz2Credit.
Typically, banking customers have used laptops and other mobile devices to check account balances and credit card statements, transfer funds, and conduct bill payments. Now you can do much more. A little more than five years ago, about 25 percent of small business loan applications were done by mobile devices. Today that figure is about 60 percent, which indicates we have seen an irreversible revolution in the industry.
Banks and institutional lenders -- such as insurance companies, family funds, hedge funds, and others -- have partnered with Biz2Credit to facilitate their small business lending. Even non-profit lenders, such as Accion East, a microlender that helps women-owned and minority-owned businesses grow, have increased their lending activity through automating their systems.
Millennials, the part of the population born between 1980 and 2000, have overtaken Baby Boomers as the largest segment of the U.S. population. These 20-somethings and 30-somethings are tech-savvy and accustomed to doing just about anything on their smart phones and tablets. Many of them are entrepreneurial and seeking to start their own businesses, and to do this they need funding, and they need to know where to get it. This is where you come in.
Some entrepreneurs are able to go through the process on their own and apply for funding via their laptops or their mobile devices. Others will likely seek help through trusted advisors, such as their accountants, for financial matters. In 21st century business, mobile transactions will continue to boom, and demand for expanded banking capabilities by small business owners will drive the marketplace. Lenders and borrowers will be wise to keep pace.
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