Small business owners need access to better funding. Technology can finally help.
Over the past twenty years, small business owners have been squeezed by a lack of funding and technology that works only for big corporations. There is a better way and its coming to your city soon.
Responsible rates - Irresponsible rates are rates that are designed to put a lender’s profitability ahead of a business’ needs. The good news is that rather than dealing with big banks and online lenders who have to do this, business owners can deal with local community lenders whose mission is to do the opposite by putting owners first.
The challenge is that until now, community lenders have not had access to the kind of data that would help them manage their own risk better in order to offer more competitive rates. Now they can. Using the same technology as big banks, community banks can combine business accounting and spreadsheet data with municipal data to provide a clearer picture of a business’ ability to generate revenue and local impact.
Transparent process - While it’s true that online lenders can give you an answer in as little as 10 minutes, it’s typically because they are using a FICO score which 70 million Americans lack. They also use a decision process which can best be described as “black box” because it doesn’t help the owner understand what went into the lender’s decision.
Now that technology has become more affordable, community lenders have the ability put the owner in more control of the application process so they can understand where they are in the process and how close the lender is to making a decision.
Flexible Terms - There are two types of financial capital: impatient capital and patient capital. Impatient capital is capital that wants to grow as quickly as possible. Patient capital can afford to wait to grow. Impatient capital means inflexible terms and a cookie-cutter approach. Patient capital means flexible terms like interest-only payments and cash-flow friendly terms.
Flexible term loans use a business’ information to match its pace, resulting in loans that make allowances for the investments owners need to make in order for growth to happen. For example, a manufacturer might need to expand production capacity, a retailer might need to increase inventory on hand, a contractor might need to improve its choice of suppliers, and a restauranteur might need to hire more reliable workers.
Better funding starts with better values, and that means working with a lender that puts your needs ahead of theirs. Only community lenders and Credit Unions do this. Their challenge is that up until now, technology has only been built to serve profit rather than our local communities. We can change that using technology that serves a community’s needs and helps community lenders be the best source for local business loans.