In recent years, the SME landscape has been transformed through the development of technology – particularly fintech solutions – that have helped level the playing fields and enable businesses to compete with larger incumbents.
Advancements in business technology can often empower smaller companies – with limited budgets – to utilise software solutions for scaling their operations effectively.
What is business lending technology?
Data and analytics have revolutionised the funding process, enabling lenders to quickly build accurate risk profiles and comprehensive business assessments for prospective clients.
Through AI and automation, lenders can predict future financing needs of businesses, assess affordability, and even evaluate wider macroeconomic risks.
Moreover, the collaboration between traditional financiers and alternative lenders – through use of technologies like Open Banking – has unequivocally enhanced business lending outcomes.
For example, alternative small business lending by specialist financial institutions and challenger banks hit record highs in 2022 (£35.5 billion).
This figure surpasses the level of gross lending by traditional banks and financiers across the previous calendar year, accounting for 55% of the total £65.1 billion issued to micro and small businesses.
How are business lenders using fintech?
The advent and integration of new technologies have transformed business practices, especially in the lending sector.
Modern lenders – regardless of their size – are now expected to offer services that are automated, data-driven, personalised, transparent, and flexible to meet the diverse needs of business customers.
The era of ‘one size fits all’ products and customer services has become a thing of the past in this tech-driven environment.
To thrive as a funder of SMEs, organisations need to be truly flexible and offer customised funding solutions to their clients, like specialist business lender Got Capital.
What is fintech for small business?
Small businesses are increasingly leveraging technologies, such as cloud computing and AI-driven financial modelling tools, to compete with larger companies.
Accounting software platforms can now integrate directly with business bank accounts, streamlining bookkeeping and automating a once manual process.
Additionally, many payment processors offer a variety of point-of-sale options, helping businesses tap into new markets, boost profitability, and increase their operational flexibility.
Other tools that provide thorough insight into a company’s financial health and creditworthiness, can be invaluable to small business owners and directors, given the unpredictable nature of SME cashflow.
Summary
In democratising technology and finance, it’s crucial for traditional financiers, challenger banks, alternative lenders, regulators, government to collaborate.
By embracing and leveraging fintech innovations, lenders and SMEs alike can thrive across the UK business landscape.
Small businesses access unsecured, fast funding from Got Capital. As an alternative lender, Got Capital offers financing solutions specifically designed for and catered to the needs of SMEs.
