Loan fintechs have changed the way borrowing credit all over the world – Ask any entrepreneur or business owner who will bluntly say that access to working capital is one of the most challenging parts in running a small or medium business . Small businesses often seek business financing for expansion, swapping stocks, purchasing machinery and equipment, or surviving common cash flow problems.
Financing business with loan fintechs
Traditionally, banks have extended credit to small businesses based on their credit history, credit score, individual analysis of the entrepreneur at the creditor institution, and at Serasa Experian, SPC, Boa Vista and other bureaus, in addition to the personal credit score. The result is then used as the basis for underwriting or evaluating a company’s creditworthiness based on a variety of factors.
The components that make up the credit score include things like credit duration, payment history, income, debt levels and margin debt / credit, everything is analyzed to provide a current report of the ability of the borrower to repay the loan on time established with the lowest risk.
Often, the request process may take a few days or depending on the mode, a few weeks or months before the bank returns with a favorable decision, however, today most of the application processes involve little analysis of the financial health of the business – but how ? Got crazy?
Not! Experience has shown that the result with the use of personal credit as an indicator of credibility, has made many owners of micro, medium and small businesses have their requests denied because of personal credit history, despite the clear financial strength of their Business. Using personal credit scores to weigh the credibility of a business has always been done so, and so the rate of approval of commercial loans for business applications was only 20%.
With loan fintechs this has changed, advanced software understands that a person’s good or bad credit is clearly not the best barometer to generate credibility or be the best indicator of how a small business will act in the future. So it was necessary to replace the use of personal credit analysis for a system that is more aligned with the financial health of the business and not with the business owner – does that make sense to you?
Fintechs: the future of business finance for business
Type in google about “financial technology”, or “loan fintechs”. Just Online, Simplic, Creditas, Lendico, MoneyMan, Geru, Good Credit, Biva, Nexoos, Catarse, Kickante crowdfunding are examples of how fintechs have fundamentally changed the way they borrow and apply for personal and corporate loans .
Online lending platforms and applications are able to aggregate large amounts of data into intelligent learning algorithms, ie, the machine or the software make the credit decision in a few minutes, the approval is based on the general business, not just the CNPJ of the company or in the owner’s CPF.
Check out: 12 Best Online Personal Loan Companies
Online loan sites, platforms and applications
This is possible thanks to cloud computing and the growth of online business applications that provide commercial lenders with much more business data than previously available. It is now possible for creditors to quickly and easily connect to all transactional data from multiple sources of information in order to provide a clearer report of financial stability, credibility and risk much faster and on a larger scale.
The more data they receive about their business, the more likely they are to make a favorable credit decision. During this process, the borrowers send several important company data that are used to determine their credit limits. The result is that borrowers now have quicker and easier access to the capital required to grow or sustain their business.
The revolution of online loan fintechs companies
Although Fintech’s lending companies still represent only a relatively small portion of global business loans, its impact on the business loan market is undeniable.
The loan companies that use the technology as a propeller (the technological fintechs), are changing the process of applying for credit forever and will not have back.
Loan Fintechs to Borrow Loan
It’s fact! As they continue to grow and innovate, it is becoming increasingly clear that ” loan fintechs ” will positively influence borrowing access both to lending to individuals for both small and medium-sized lending, facilitating approval of money into working capital and making financing an extremely viable solution for the coming decades.