Fintech companies have brought about major reforms in the lending industry. Financial technology has seen a great rise and expansion in the last few years and it is expected that we will be able to see a great proliferation in the next few years as well. Thanks to the next-generation technology and strong business models, the services offered through the Fintech companies are giving great and tough competition for the industry leaders.
There are great software and technical alternatives that are used to evaluate the loan receiving capacity of a business owner. This has completely transformed the existing traditional concept when it comes to loan application and approval.
Getting a business loan has always been a tedious process and concern for several businesses. For a long time business loan was tough to avail of, however, with the advent in technology and the arrival of Fintech companies, the number small businesses that are able to avail of business loans have increased drastically.
There are a number of reasons that suggest taking a loan from Fintech companies is way better than the traditional banks or any other financial institutions, few of such reasons are as follows:
- Reduced amount of paperwork: Almost every Fintech organization conducts the business through online alternatives like web-portal and mobile applications. This reduces the amount of paperwork to a great extent. Even the customers, these days, are more comfortable managing the operations online through the solutions available to them.
- Easy processes involved: There are no complex procedures involved when it comes to applying for a loan through Fintech companies. The procedures are easy for every individual to comprehend and act accordingly. The eligibility check can also be done online thus making it more transparent and convenient.
- Complete online processing: The entire process is online, right from forwarding the loan application to its evaluation; Fintech companies make comprehensive use of the online solutions and digital alternatives that are available to them. This practice actually benefits them to a great extent.
- The concept of collateral-free business loan: Fintech companies also entertain unsecured business loan where the amount is credited on the basis of the individual credit rating of the borrower and also on the potential of the business. There is no need to attach any collateral to the application and this factor is deeply cherished by the individual borrowers.
- No penalty of paying the amount before the maturity time: : If you are able to manage the finances from your end and you are able to repay the loan amount before time, you can do so without paying the Fintech companies any kind of extra charge or penalties.
Fintech companies understand the need and urgency of getting your business goals executed and hence, they provide instant business loans within the span of a few days.
There are around 42.5 million SMEs in India. Small and medium enterprises require funds frequently for organizational operations. Fintech companies provide fast business loans so that SMEs can meet their goals. The Indian start-ups witnessed a growth of 108% in total funding i.e. in 2017 it was USD 2 billion whereas in 2018 it increased to USD 4.2 billion as reported by National Association of Software and Services Companies.