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The Effect of Technology on Business Financing

December 13, 2022 No Comments

by Marisela Obando

Small businesses are the lifeblood of our communities and our economy. However, as an entrepreneur, you know full well that there are times when you may need a bit of help in the way of a loan or a line of credit. Luckily, getting financing has never been easier. Development in technology has fundamentally changed how we do business, and you have more opportunity than ever to get the help you need. How has technology made lending easier? Here is a quick guide.

Easier Application Process

It has never been easier to apply for funding. Traditionally, you’d have to apply, then have an interview at the bank involving several people, and then the approval would come through. It could take days or even weeks. Now you can apply from just about anywhere. Lenders have an online portal allowing you to not only fill out the application forms, but also submit documents and signatures. Some banks still require many of the old steps, but modern online alternatives have completely digitized the process, making it clean and simple.

More Lenders Are Accessible

In the past, banks could only borrow money from a lender that would be in the geographical area. Perhaps there would be one available by phone or internet, but they’d have to ship documents back and forth. Businesses would have to search for a quality lender or use word-of-mouth. Nowadays, a Google search will yield the results they are looking for. Not only will they get lenders in their area, but they will also get lenders around the county and even the world. There are more options than ever and more types of funding for your business available.

Small Businesses Can Get Funds Fast

The approval process is streamlined, meaning businesses can get their funds faster that ever. Documents are sent through electronically, and lenders are able to view everything with a few clicks of a mouse. Even credit checks, which used to take time, now take only seconds to process. Businesses can apply, be approved, and have the funds in their account within days and sometimes even hours. Not only does this save time, but getting funds quickly means that businesses can take advantage of opportunities that may have a time crunch, or prevent cash flow problems.

Flexibility

Financial agreements used to take a lot of effort in the past. For example, businesses and the lender used to have to make phone calls and set up appointments to have agreements changed. Now, there is no need for appointments. You can update your agreements online in a matter of minutes. Contract details or small changes can be handled with as little effort as necessary. This also means that more lenders can offer specialized and flexible options for your financing needs. For example, lenders may have unique repayment terms to suit a business, or have a longer or shorter repayment schedule.

Online Banking

There’s no accounting for the impact that online banking has had in the past 20 years. In the past, you had to head to your bank to transfer funds, make deposits, withdraw cash, and do anything else with your account. Now, you can do anything with your account from the comfort of your desk chair. You can check your purchases and activity, and monitor everything for your account in real-time.

Security

Businesses need to know that not only will they get flexible funding alternatives, but their account will be monitored as well. Now you can get alerts to your cell phone or email when your account has been used, or when a suspicious transaction has taken place. This heightened security, enhanced by your preferences, means that you do business without fear.

Technology has improved our lives in ways we cannot measure. Business financing has changed for the better because of the speed, security, and options that the market can now provide.

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