Small Businesses Shift to Fintechs
As Covid-19 impacts small business owners during these challenging and uncertain times, proprietors are looking for ways to support their operations. When the Small Business Administration released the Paycheck Protection Program (PPP), many small business owners were pressed to receive approved loans as quickly as possible.
However, banks and traditional financial institutions have been unable to approve these loans quickly enough due to their lengthy, archaic processes. This is in addition to biased attitudes that disfavor unfamiliar, higher-risk customers the banks have traditionally underserved. This dilemma of banks became apparent after the rapid depletion of the first round of the PPP, which left small businesses looking for alternative sources of funding.
Through working with fintechs, small business owners received personable service and financial support. In particular, fintechs proved more agile, providing customers with superior user experience and flexibility, including faster application processing. Through advanced technology and superior service, fintechs have experienced exponential growth in demand from small businesses for capital, further solidifying their position in the lending ecosystem.
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