30 hours of paperwork. Countless conversations with the bank. Weeks of wait time before a decision. Getting a small business loan is so time-consuming, in fact, that 31% of businesses who applied for a loan in 2015 considered it a negative experience – this is according to Barlow 2015 Small Business Credit Survey.
Which complaint ranked #1 among these businesses? Loan application processes are way too cumbersome at traditional lenders. Over half of SMBs surveyed cited these long, clunky processes as a reason for their dissatisfaction. What ranked #2 on their list? Too long of a wait for a credit decision. Almost half of SMBs seeking credit from traditional lenders cited this problem.
These two problems boil down to convenience and speed – and an online loan application solves both issues in a single stroke. Online access matters so much, in fact, over a third of SMBs indicated they would switch banks for a better online banking system. Business owners under 45 – which represents 12% of all SMB owners, a rapidly growing segment – are twice as likely to switch banks for a better online banking system compared to business owners over 65.
Marketplace lenders have stepped in to provide credit quickly and efficiently, sometimes charging more than 50% APR. Even with this supply of investor capital in online marketplaces, it is estimated that there remains at least a $70 billion funding gap in small business financing.
How do traditional lenders get their piece of the pie in a way that makes them profitable while they retain control of their lending process? In partnership with NACUSO, Mirador hosted a webinar addresseing just that. Watch the recording of Creating a Smarter, Faster and More Profitable SMB Lending Process to learn:
- How to create a smarter, faster lending practice for increased profitability on small-dollar loans
- Why bringing your lending process online leads to higher loan volumes
- How an enhanced borrower experience leads to happier, more loyal customers