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 apply for loans from a tablet or smart phone.
Despite the growing trend towards online transactions, 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 like Biz2Credit.
Typically, banking customers have gone online 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, TaxAct partner Biz2Credit reports that more than half of registrations on its small business lending platform come via mobile devices. This 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.
In the 21st century business world, mobile transactions will continue to boom, and demand for expanded banking capabilities by small business owners will drive the marketplace. Both lenders and borrowers will be wise to keep pace.