Over a decade now, many home buyers are no longer going to banks or traditional financial institutions to apply for home loans and mortgages. Instead, they are seeking financial assistance from alternative lenders. This trend is evident given the fact that six of the top ten home lenders are now non-bank entities.
While there is this shift in the housing market, other types of common loans have not been given much attention. But when private business lender Credibly conducted a new survey, a similar pattern emerged in the small to medium-size business (SMB) segment.
In The Business Of Business
The survey questions 343 SMBS that had obtained funding from Credibly located in the US. The survey questions covered topics such as biggest challenges and opportunities to which areas of their operation had the most urgent need for working capital.
According to the survey, 62.5% of the respondents intentionally skipped dealing with traditional banks. That is because SMB borrowers approached first non-bank lenders first. While 48.6% of the respondents already knew that they would not be granted a traditional business loan, 32.2% pointed to the long-drawn process, including the release of the loan, as the primary reason for applying elsewhere. The rest of the respondents were confused (10.2%) with the application process and the terms of the loans were not as attractive (9.0 %).
The volume of SMB loan applicants at Credibly has risen in the past three years. Since Credibly’s loan limits are from $5,000 to $250,000, these amounts easily accommodates SMBs since the typical loan requests range from $15,000 to $80,000.
Credibly’s objective is two-pronged – remove the bottlenecks in the lending process and focus on the operational needs of the SMBs. The result is business efficiency and growth.