Banking hours have changed—albeit not by much. Typically open from 9am to 4pm five days a week, with a partial day on Saturday, banks form a steady if limited commercial presence.
Now, consider the hours of an average small business owner: 24/7. And none of these are necessarily earmarked for visiting a branch to apply for a small business loan.
The reality? Many small business leaders work all day and well into the night, plus weekends and holidays. Many have little extra time to step away from day-to-day sales, operations, and other activities—even for needed capital. What happens when borrowers can’t get to a bank to apply for a small business loan? Their capital needs go unmet and their business suffers.
This issue is especially acute for small businesses that lack a financial officer or finance department, which is to say, most small businesses. And for your bank—this eliminates a substantial segment of creditworthy borrowers.
Let’s take a closer look at how this trickles through a small business.
Being open equals opportunity
Constrained by a bank’s opening hours, small borrowers have a conundrum: relinquish precious time to visit their local branch and gather extensive documentation, forgo a much-needed loan, or work with an anonymous online lender.
For local banks, there is a better middle ground—one that addresses the needs of local small business borrowers, while putting your capital to work. Online solutions like LendingFront make it possible for community banks and credit unions to service their customers any time, any day. Online lending solutions enable business owners to apply for loans—including uploading documents—around their busy schedules. Midnight Thursday. 7am Sunday. Around the clock, business owners can apply for funds to see them through a cash slowdown, build inventory in anticipation of a sales influx, make suddenly needed repairs, and more.
When crisis strikes, online lending is open for business
Up to now, we’ve addressed the typical lending scenario. But there are times, and unfortunately these are arriving with greater frequency, when a crisis occurs that physically prevents small business owners from coming into a bank to apply for a loan. With wildfires in California, tornado outbreaks in the south, flooding across the states, and now the coronavirus pandemic, we are seeing unprecedented—and unpredictable—disruption. For most small businesses, a loan of $10,000 to $25,000 can make all the difference.
As a local lender, you can be the lifeline to the small businesses that support our local communities. Help them make payroll and cover their utilities and rent—until conditions stabilize. When times are strong, you can also be the lender that helps businesses ramp up sales and production—and expand.
Online lending is also your channel for continuing to deploy your bank’s cash reserves. While bank branches are considered critical infrastructure, some of your loan officers may have to work remotely, whether due to climate conditions or COVID-19 related social distancing. Online lending not only enables your bank to maintain loan operations (online is infinite social distancing), it allows you to expand your lending capabilities—and not just for during a crisis, but ongoing.
Digital loan applications cut through the constraints of time and location. But not all digital products are created equally. LendingFront is a sophisticated end-to-end solution exclusively for originating, underwriting, and servicing small business loans. With LendingFront as part of your business lending tool kit, small business owners can submit their application and upload documents online and you can apply your rules for approval—helping both borrowers and lenders avoid days, if not weeks, of processing delay and hassle.
When small business borrowers can’t get to the bank, you can still help them access capital with online lending.