Traditional lending is still the most used form of lending today, but the fact is that alternative lending options are becoming much stronger. As a matter of fact, there are some predictions that suggest that about 20% of small business loans in 2020 will be issued by alternative lenders. The so-called fintech is on the rise, but did you know that things are changing all the time in this world of online business lending? It doesn’t matter whether you want to sell online or conduct another type of business over the Internet; it is the best idea to learn more about the latest online business lending trends.
Cooperation between banks and alternative lenders
Let’s be clear – modern banks, just like banks in the past, have a huge customer base and they also enjoy a low cost of capital. On the other hand, alternative lenders are more flexible, provide better user experience and use specific laws and regulations to get more clients. What is interesting is the fact that many banks and alternative lenders have started cooperating. This cooperation will shape up the look of future small business loans, so you need to follow these developments carefully.
Online lenders have been present in the market for a few years now. Yet, most of them are still focused on one thing – providing loans. For some people, this may sight logical because after all they are called lenders. However, the banks didn’t start as financial institutions that will provide different services, yet they are doing this today. So, it is very likely that online lenders in the future will start providing multi-product deals for their clients like mortgages, credit cards, debit cards, personal loans etc.
As we have already mentioned, many online lenders are using the loopholes in the system, but this situation won’t last for long. There are some initiatives in many countries including the US for better regulation of fintech. It won’t take much time before we see new laws focused on this type of financing.
Tendency for self-policing
In the beginning, there were absolutely no rules and expectations, but over the years the top players in this field have established a set of self-policing terms. This makes the borrowers safer and more prepared for the things they can expect from the reputable companies in this field.
— High Risk Holdings (@HighRiskHolding) 23 de junio de 2017