If you are an online lender, this post from the Rules of Thumb blog from MoneyThumb should be of great interest to you, for we are going to share with you several ways small businesses have changed that are to your advantage.
Just as with any small business owner, an online lender is always on the lookout for new customers. If your goal is to attract more small business borrowers, the first thing you should realize is how much small business has changed. For instance, here is what the lender Kabbage's co-founder and CEO, Rob Frohwein, has to say, “The business customer has definitely changed. When we first launched, we were lending to eBay business. Now, we lend to all small businesses: whether they sell products or services, whether they’re in retail or professional services. Our borrowers have gone from very small online sellers on marketplaces like eBay and Amazon to those with much larger businesses.”
The fact is, online business has grown substantially and will continue to do so. As a result, small business owners have become smarter and more sophisticated. Eyal Lifshitz, founder, and CEO of Blue Vine says this about the new breed of small business owners, “Over time, we’ve seen businesses begin to grasp the different types of financing like loans, inventory financing, merchant cash advance, and factoring. They understand that one type of financial product isn’t necessarily better than any other — it’s just that they’re more appropriate for specific types of situations or small businesses.”
One major change that has occurred in the last 5-10 years is that where once a small business owner would instantly think to only approach an offline bank for financing, now they are skipping that step and going straight online to search for financing. And getting an online loan has become easier than ever, and much quicker. One of the reasons is to the depth of information that can be gathered by lenders using data automation. Luke Voiles, a business leader at Intuit's QuickBooks Capital, puts it like this, "Banks needed two years of audited financial statements and tax returns to see a trended and validated view on small business. The data that digital lenders like us use is at the transaction level of detail that is much more real time. After a customer consents, we have QBO transaction data, payments transactions for cash we’ve moved for our customers — the highest validation you can get. What’s changed is the ability to triangulate and get to a trended view of a business from the data which is so much more granular.”
MoneyThumb loves being on the cutting edge of that trend toward data automation with our world-class PDF financial file converters. We were doing this long before it became cool. Now many lenders use our products to quickly convert the bank statements of potential borrowers, allowing them to make better and faster lending decisions. We have a version of our software specifically designed for lenders. Take a test drive today!