How do the different types of loans help a small business to grow?

Small businesses face many challenges and the majority of them are related to money. Thankfully today, getting a small business loan is possible in a blink of an eye because of technology. Competition from fintech not only increases the availability of financial services, it can also promote lower prices, and create new services through tailoring or packaging for specific markets, as well as innovation.  Fintech can also deliver other benefits, like speed, security, and convenience. Some of the results are stunning, with fintech companies that were themselves small businesses rapidly expanding into the service vacuum left by big banks.

By leveraging e-commerce and advanced analytics to enhance credit underwriting, fintechs can loan amounts of $5000 to $500,000 more freely, faster and on more favourable terms than traditional business banking operations.

There are various types of loans for special requirements of a business:

Business loans for women

More women are starting their own businesses. But when it comes to entrepreneurship, it’s still a man’s world. Women entrepreneurs continue to encounter gender bias when it comes to raising capital. Fortunately, women business owners now have more options with the increase of alternative business lenders. Online lenders offer a streamlined application & approval process that makes it convenient for women business owners to juggle their many responsibilities.

Loans for Equipment

Commonly known as Asset Finance, Equipment Financing enables you to purchase plant, equipment & machinery that your business can use & which can be attractively structured to suit your cash flow. The security is called a Chattel Mortgage or Commercial loan, where the lender places a “charge” over the asset until it is paid out. The application for Asset Finance is fast, structured & simple.

Loans for Working Capital

When seeking capital, small to medium business owners often hit roadblocks related to the age of their business, the liquidity of their assets & the availability of collateral. In this classic catch 22 scenario, they are denied the funds their business needs to grow & achieve stable profitability. Enter the innovative Fintech lenders who use big data & performance analytics to overcome the traditional lending assessment protocols. This underserved small business sector is now getting the attention they deserve from willing lenders.

SME Loans

SMEs rely on credit for a number of business activities. The key reasons why SMEs seek debt or equity finance are to:

  • maintain short-term cash flow
  • replace or purchase equipment or machinery
  • pursue expansion opportunities, or
  • ensure the survival of the business.

Credit availability is increasingly being filled by fintechs and other alternative finance disruptors, who use technology and innovative business models to originate, assess credit risk and fund loans. They have easy application processes and quicker turnaround times. This makes fintech products attractive to time-poor SMEs. Innovative fintech solutions can assist small businesses manage their cash flow and working capital, and can efficiently and effectively provide stable funding for small business growth activities

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