32% of SMEs now work with online lenders for business credit. Lenders lure SMEs away from traditional credit options with simple application processes, rapid decisions, and high approval rates. Over the last few years leading fintechs have driven major innovation in the SME lending industry, with digital lenders using technology to decrease approval times from months to minutes, without exposing themselves to undue risk. This increased competition for SME business poses a significant threat to lenders who delay innovation strategies. Not only do they risk losing potential new clients, but existing customers are also drawn away by the convenience offered by digital alternatives.
From the graphic above it’s easy to see why online lenders are so appealing to SMEs looking for funds. But, how do alternative lenders manage to compress what has traditionally been a long, paper heavy, and manual process into a slick and quick online application experience? Innovative fintechs and banks have found ways to use technology to break down the barriers that prevent loan applications moving swiftly and efficiently through the decisioning and underwriting process.
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