Apple Pay, Venmo, Zelle. Fintech has been a key player in personal finance for years. For many, personal banking, investing, and money transfers have gone entirely digital. Fewer and fewer people step foot in banks and brokerage firms, since they don’t have to.
So why don’t small businesses have a similar wealth of options? The fact is, small business lenders offering digital loan origination software are currently few and far between—a market gap your bank can easily fill.
With many small businesses experiencing year-over-year revenue growth, capitalizing on their potential offers a real chance for lenders to profit. Drawing on what’s worked for consumer fintech products, here are some key capabilities of digital lending software, along with how they’ll benefit both you and your small business borrowers.
Processing loan applications—digitally
Think about the last time you applied for a personal credit card. Did you complete and submit your application online? For example, if you applied for Apple’s credit card, you probably got your answer in seconds. If approved, it took just another few seconds for the card to pop into your Apple wallet.
This is the ease, efficiency, and yes—instant gratification—that today’s consumers expect. Yet when it comes to managing small business finances, this isn’t the typical experience. (It’s ironic, since banks tend to link small business owners’ personal finances to their loan applications.)
Digital loan origination software provides small business owners with the option to submit their application forms online—without having to visit a branch, speak with a lender, or interact with your call center. This doesn’t just speed up the process for them, it makes things more efficient for you as well. That can drive valuable cost savings, help increase overall loan revenue, and make small business loans more profitable for your organization as a whole.
Instantly uploading digital documents
For most of us, making deposits is a seamless experience. We snap a photo of a check on our phones, and instantly upload and process it through our bank’s app. Even small business owners who may be depositing their checks in person enjoy efficient drop-ins. But in-person loan applications don’t offer small business owners the same level of ease. It’s tedious and time consuming, and requires a slew of paper document collection ahead of the appointment.
For many small business owners, it would be incredibly valuable to add their loan documentation online. From driver’s licenses to certificates of incorporation, small business applicants want to be able to snap photos and upload, rather than having to fax, mail, or walk these documents in. This is another capability of digital lending software—and one that time-starved small business borrowers will be especially grateful for.
Seamlessly linking applicant bank accounts
Chances are, your checking account is linked to your savings account. Your savings account is likely linked to your investment or retirement account. And any money transfer or auto-payment setup means that your account (e.g. Venmo or your mortgage company) is linked to your funding source account.
Linked accounts simplify transfers, payments, and similar transactions. It can also boost the security of any transaction by mitigating hacking opportunities. And yes, it can help small business loan applicants complete their applications as well.
Rather than require small business applicants to manually locate, scan, and upload financial and credit statements from years past, your software can give them the ability to link their bank account to their loan application so that you can see revenue, expenses, and most importantly, cash flow. What that means for you: more completed applications, greater visibility, better evaluations, and more time for your lending officers to spend with larger accounts.
Prioritizing mobile compatibility
Do you send Venmos from cabs? Use Paypal from the office stairwell? Tap into your Apple Wallet at the basketball game to check your account balance? The ability to manage and transfer funds from our cell phones is something that most of us have come to expect—and it’s something that small business owners—most of whom work on-the-go—rely on being able to do. Adopting loan management software with mobile accessibility is essential for generating more qualified applications—especially as digitally-savvy younger generations continue to age into business ownership.