Challenges in Small Business Lending

Reading through the Federal Deposit Insurance Corporation (FDIC) Report on Small Business Lending reveals the critical need for working capital loans: 💸 Over 60% of small businesses report cash flow as a primary challenge, with many struggling to cover payroll, rent, and inventory expenses. 💡 Loans between $10,000 and $100,000 are the most sought-after by small business owners because they provide essential short-term liquidity without excessive debt burdens. 🏦 Traditional financial institutions have tightened lending requirements, leaving many small businesses to seek alternative financing options. #smallbusinesses need access to flexible, fast, and affordable loan options to remain competitive. When these needs go unmet by traditional financial institutions, fintech companies and non-bank lenders step in to fill the gap, often with streamlined digital application processes and quicker approvals. Would be great if a #fintech company partnered with #banks to offer a simple way for #businesses to get approved and funded for working capital loans inside digital banking...... 🤔 #bankingindustry #fintech #digitalbanking #smallbusinessbanking  

Underwriting a $100K small business loan takes the same effort as a $5M commercial loan. Guess which one gets prioritized? Lenders, whether banks or non-bank IFCs, make money when loans are repaid. But with small businesses, credit assessment takes time and is complex to scale profitably. That’s why many lenders are hesitant to underwrite small-business loans. The effort often outweighs the returns. Even two businesses on the same street, with the same size and industry, can have completely different repayment behavior. Why? - Seasonal fluctuations - Unpredictable cash flows - Delayed vendor payments This makes traditional underwriting slow, manual, and hard to scale, especially for small-ticket loans. We’ve been working on automating some of the painful parts: collecting financials, parsing statements, making it easier to collect all required documents, extracting information from a huge pile of documents, flagging risks, and generating credit summaries that help underwriters move faster. If you’re looking to streamline your processes or just sitting on a pile of applications and taking hours or days to get to it, I would be happy to exchange notes, building in this space or thinking about SMB credit, happy to share notes. #Fintech #SMELoans #Underwriting #KaajAI #VendorFinancing #CreditAutomation #Fintech #LendingTech #NBFC #AIinFinance #Underwriting #EquipmentFinancing #WorkingCapital #MCA

Why are banks still so slow? I was reading a recent deBanked article and it keeps hitting home - a major problem in small business lending still exists: traditional banks are seriously behind when it comes to automation and accessibility. Here is what sticks out: according to the FDIC only 10% of banks have a credit-scoring system that can partially automate underwriting, and less than 1% will auto-approve a $250,000 loan. Meanwhile, almost half of banks have no plans to integrate fintech into lending processes. For business owners, this means long wait times, tons of paperwork, and limited access to capital which they need to grow. Here are the ongoing realities for Small Business Owners: ✅ Slow and Inefficient Lending – Loan approvals take 10+ days, forcing business owners to wait when they need capital fast. ✅ Lack of Accessibility – Banks still rely on physical branches, limiting who gets access to funding. ✅ Missed Growth Opportunities – Delays in funding often mean lost revenue, stalled expansion, or difficulty covering expenses. It's exactly why I built Loanspark. Over my 25 years in mortgage and commercial lending, I saw how small businesses were being underserved, and I knew I had to create a better way. So I worked with my team to create a platform and services offering that helps in these meaningful ways: 🚀 Faster approvals through automation and data-driven decisioning. 💻 A seamless digital experience that eliminates paperwork and in-person visits. 📈 Diverse funding solutions that work on a business’s timeline, not the bank’s. 🤝 A human-first approach that combines technology with expert guidance. 📚 Lending education that helps businesses understand good vs. bad debt and make informed financial decisions. There is a huge benefit to a relationship-based approach, people like working with people. This is why we didn't just shove everyone into automation, and why our services include lending consultation teams for business owners who want this. Banks love their relationship-based approach too, however, without proper tools and automation it is no longer an advantage. Meet your customers where they are - with relationships AND technology enabled services. Your small business customers need real support—fast, accessible, and efficient financing that helps them grow. If you are tired of waiting, my team is here to help. If you are a bank and looking to offer a better approach for your customers, my team is here to help. 📖 Read the full article here: https://lnkd.in/eHXXB3vk #SmallBusinessLending #Fintech #BusinessGrowth #Loanspark #AlternativeFunding #SupportingSMBs #banking #banks #baas #blaas