Innovations in technology have made it easier than ever to be competitive in the business world. You can use other people’s entrepreneurship to help run your business. And new advances in financial technology, known as FinTech, are opening up funding previously available only to the well funded or well connected. Many FinTech companies are startups trying to carve out their own niche in an industry—while also changing the world.
The main advantages FinTech offers over banks are flexibility, a faster turnaround time, and easier access to funds. If you don’t like spending a lot of time waiting for funding to come through, or you want to work with a business looking to work with businesses just like yours, it may be time to start exploring the world of FinTech.
FinTech lenders and creditors are reaching out to businesses to help get the funding they need. Larger, more traditional financial services companies—eying a piece of the action—are also putting their fingers in the FinTech pie. Japanese online retailing giant Rakuten recently launched a $100 million fund for FinTech.
FinTech capital tripled in 2014 to a whopping $12.21 billion. The reason for this is not that you don’t have to prove your ability to pay back the loan as you would to a traditional bank. It’s that FinTech companies are often specifically set up for small and medium businesses, and use different methods to assess credit-worthiness, such as assessing your social media imprint along with your books. Companies offer smaller loans, and also peer-to-peer loan options that allow for crowd-sourced, short-term investments in your company.
In the past when you went into a traditional bank, you had to borrow on their terms and sometimes in amounts that might be larger than you were comfortable with, or even needed. Now you can shop around for loans online; not after a traditional bank turns you down, but before you even apply at a brick-and-mortar bank. The access for non-enterprise businesses is great. What’s even better is having a greater degree of control, allowing you to get the loan your business needs on the best terms available.
FinTech is not just for large infusions of cash for business expansions. You can also use it to fill in the gaps or make short-term expenses through rolling credit accounts. Spotcap for examples, is a company pioneering credit in the world of FinTech, encouraging entrepreneurship by offering funds to small-and-medium-sized businesses. If your business has had trouble obtaining credit from traditional institutions, Spotcap wants to talk to you. It’s an automated service. All you have to do is connect your existing financial accounts or upload your tax forms online. An algorithm quickly checks your business performance and creditworthiness in order to determine whether or not you’re extended a credit line anywhere between $500 and $100,000.
FinTech is just what the doctor ordered for thousands of businesses.
When you’re searching for credit services, don’t leave FinTech options off the
table. In many cases they may be a more attractive option than traditional banks.
Southern California. His work has appeared on MainStreet, Business Insider, WiseBread and Fox Business, amongst
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