It was not so long ago that small business owners had limited options to obtain loans to finance their companies. Borrowing and lending was not common practice within the small business sector. Today, the market is very different – driven largely by technological breakthroughs that have dramatically evolved the financial services industry, particularly for small and medium-sized enterprises (SMEs).
Enterprise Ireland client Swoop has created a platform where business owners can check financial products from business bank accounts to lending, grants and foreign exchange that enables SME owners to find faster and easier access to funding thanks to the key benefits of technology including a more streamlined borrowing experience, extra security, access to a broader range of financing options, easier management of small business finances and greater accountability and transparency.
A streamlined borrowing experience
Most top-performing loan providers have successfully reshaped the traditional borrowing experience for small businesses into one coherent process. Today, it’s easy to fill out a small business loan application, get that loan approved, or make payments to close it out from an app on a mobile device.
An extra layer of security in borrowing
Although there are still incidents of cybersecurity and personal information theft, small business loan providers quickly made some additions and improvements in their existing technology to minimize such risks. Lending companies are continuously revising and implementing protocols and additional security layers, ensuring client data protection from hacking. Appropriate and ongoing security measures should provide reassurance for small enterprise owners that the data provided to loan companies are secured.
Access to a broader range of financing options
Inefficient processes and a lack of choice of lender meant that small business owners often had little choice when it came to borrowing: with offers made at the end of an arduous process, there was little incentive to shop around, and founders often took the deal in front of them rather than spend more effort looking elsewhere. Now through platforms such as Swoop it is simpler for business owners to check out the best financing options for their small businesses, such as loan rates and terms, on one display and in one sitting. Swoop’s platform puts everything in one place so that small business owners have their pick of the market and can conveniently submit loan applications to more than one lender.
Easier management of small business finances
Sometimes, small business owners want to acquire loans from providers but do not proceed because they are already handling numerous finance-related operations, such as banks, financial advisors, insurers, and tax preparers. Adding a different provider for them consequently serves as a burden. Thanks to innovations in financial technology, small business owners can now consolidate and manage their financial accounts from several firms — including loan providers — in one platform.
Greater accountability and transparency
We have moved on from the days when SME owners had limited knowledge of loan providers and the marketplace they were considering. Today they have the opposite problem: too much information means that business owners have a need for curation and sifting of options.
The current AUS/NZ marketplace allows small business owners to take advantage of online ratings and client reviews to find out more details about the reputation of their possible choice of loan providers, encouraging accountability among lenders and lending transparency.
The integration and use of advanced technologies, such as chatbots and robo-advisors, have paved the way for lenders and business owners to make transactions seamlessly online. This shift is not happening everywhere as it relies on financial regulations to enable the technology to be used. In Australia and New Zealand, uptake was accelerated, particularly by the onset of the pandemic. This means that the region’s small business borrowing and lending have quickly ranked among the most progressive sectors in financial services.