Small businesses are the backbone of any economy, yet they often struggle to secure the financing they need to grow and thrive. In a recent study conducted by Lendio, over 1000 small business owners shared their insights on the state of SMB lending. The findings shed light on the challenges and opportunities for small businesses when it comes to accessing capital.
Key highlights from the State of SMB Lending report include:
- 68% of small businesses view access to financing as crucial for their growth.
- Despite this, many small businesses find that traditional lenders often fall short when it comes to loan amounts and terms.
- The rise of online lenders has emerged to fill this gap, but these loans tend to come with higher rates.
- 67% of small businesses have no preference for a specific lender type, showing a disconnect between businesses and available loan options.
- 85% of small business owners prioritize speed to loan approval when selecting a lender, with 77% preferring to apply for loans online or through a mobile app.
These findings underscore the need for a more streamlined and efficient lending process for small businesses. Philip Taliaferro, SVP of SaaS at Lendio, notes that many banks struggle to proactively offer SMB loan products to their depositors, leading to a risk of losing deposits to outside banks. This highlights the importance of creating a seamless and customer-centric lending experience for small businesses.
Brock Blake, CEO of Lendio, emphasizes the need for a collaborative approach to small business lending. Rather than pitting banks against alternative lenders, he suggests that all providers have a role to play in supporting small business owners. By leveraging technology and innovation, the industry can create a more inclusive and accessible ecosystem for SMBs.
As small businesses continue to navigate the challenges of securing financing, it is clear that there is a significant opportunity for lenders and service providers to bridge the gap and better serve this vital sector of the economy. By understanding and addressing the needs of small businesses, we can empower them to reach their full potential and drive economic growth.
