All aspects including business, technology and commerce are evolving, and the financial lending sector is not an exception. With 2019 halfway over, there are a couple of lending developments, which have taken companies and the financial industry by storm.
One of the most significant changes is the digitalization of banks and online lending firms. It has made things easy for lenders, as well as entrepreneurs looking for fast, easy, and instant loans. The change has inspired numerous online lenders and financial institutions to adopt new strategies and offer new loan products to the borrowers.
With online lenders and banks, going digital, small business owners and entrepreneurs are enjoying enhanced financial products and services. The cutting-edge technologies and customer experience are two of the driving factors for the change.
According to an article published on the Huffington Post
, today, funds for small businesses are just a few clicks away, thanks to the digitalization of banks and lenders online.
It has not always been that simple for lenders to provide funding for businesses, big or small. The problem was with the traditional lending systems and a long-drawn process of business loan approval.
Based on the findings from the U.S. Small Business Administration
, there are approximately 23 million small businesses in America, which means there is a huge market for online lenders after the digitalization of the financial sector. Read on to learn more about these top five lending trends in 2019.
Digitalization of the financial sector will keep evolving
Though the traditional banking system continues to exist, it does not mean online lenders will not thrive. There are numerous online lending institutions that will continue to expand and grow with respect to size and people.
Even companies like PayPal are offering business loans with the growth and development of the financial sector. Online lenders and banks are building their individual digital platforms for the ease of business lending. That is the reason why lenders are offering business loans to startups and entrepreneurs. The process is easy and fast through online loan applications.
The current market of online lenders would improve their loan products, thus embracing a gamut of lending options to entrepreneurs. The popularity of digital lending will help lending institutions to procure more capital, thus helping the lenders to offer bigger and diverse financial solutions. Therefore, we see that the digitalization of banks and lending agencies are beneficial for lenders as well as entrepreneurs looking for business loans.
Artificial intelligence (AI) is the new buzzword in 2019. It has made lending business funds to entrepreneurs super easy and convenient. That is the reason why both traditional banking and online lenders are adopting AI while offering loans to businesses.
When it comes to cutting-edge technology such as AI, it helps startups and business owners to operate with accuracy and speed as well as boost their processing abilities. As far as business loans are concerned, AI accelerates the lending process and speeds up the loan underwriting procedure as well as approval. Besides, it also improves the lender-entrepreneur relationship and enhances repayment schedules.
There are many online lending firms, which are embracing machine learning and blockchain technologies to boost their lending process and their ability to keep track of current loans. Such trends will keep evolving with the advancement of technologies in 2019 and in the days to come. If you want to learn more about online business lending, or how it works, visit websites like libertylending.com
or similar platforms.
The reality of the Lending Act
According to this law, lenders will need to inform small business owners and entrepreneurs the annual rate they would shell out for funding their business. Though the law is not essential in most of the US states now, once the SAFE Lending Act of 2019 is passed in California, it might be implemented in the other states as well in the days to come.
It is possible the variations of this act will take some time to pass into legislation somewhere else. Then, most of the lenders will update their business lending methods, procedures, and practices at the corporate level to help them operate in the state of California.
As per the U.S. Treasury Department, the significant changes will protect entrepreneurs from unfair and inaccurate credit card practices as well as credit billing. It will help the lenders to operate with more transparency and entrepreneurs will exercise increased control over their business loan and its subsequent implementation. Therefore, lenders should watch out for the change in law and continue lending funds to business owners sans any complications.
One of the most exciting and pioneering trends this year is the shift towards predictive technology to fund businesses. The lending industry is experiencing significant developments in 2019 and the future. It will have a great impact on all the core sectors of the financial industry. The lending firms and banks being data-driven, the role and effect of predictive banking are high. It would prove crucial for online lenders and banks.
One of the major benefits of AI and predictive banking is the enhancement of customer engagement and retention. AI and predictive technology will bring change in administrative tasks, thus helping the lending companies to focus more on developing a mutually beneficial relationship with business owners seeking loans.
The use of predictive technology in lending funds is also one of the best ways to monitor and identify frauds. The popularity of AI and predictive banking has opened up many channels for communication, better lending facilities, and interaction. It includes mobile applications, websites, and secured lending platforms, thus reducing the possibility of fraud to a considerable extent.
Cloud technology will make business lending easy
Cloud technologies will take banks and lending companies to the next level when it comes to business lending. It has resulted in zero switching costs, smooth fund transfer to businesses, and no waiting time. Cloud technologies have the potential to make the process of business lending enhanced, thus making financial services flawless with the elimination of security and privacy issues.
Due to the digitalization and automation of the lending sector, numerous lending companies are now receiving significant investment for a long time. Today, online lenders have their individual applications to fund businesses.