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New trends emerging in alternative lending

Jun 10, 2013 Simon Williams

New trends emerging in alternative lending

New trends in alternative lending and short term financing are beginning to emerge, as consumers and businesses seek the best deals on credit available according to their specific needs. The financial crisis roughly five years ago continues to reverberate through the financial services sector, and many corporate executives and consumers are looking to avoid traditional banking solutions at all costs.

This trend has led to more competition in the alternative financial services realm, as well as in the short term financing sector, and subsequently improved the options available to borrowers of all kinds. As business owners often cite access to credit as the most important component of starting and expanding their small companies, these advancements in the various financial services sectors have been crucial to continued economic growth.

Peer-to-peer on the rise

BDaily recently reported that peer-to-peer lending has become more popular among small businesses and other private borrowers. This alternative form of financing has grown along with crowdfunding and other options in the years following the fiscal crisis in the United Kingdom, as well as that in North America and other nations.

According to the news provider, some experts believe that this type of funding might be bridging a crucial gap between demand among small business owners and supply from traditional banking services providers. Analysts believe that the rapidly rising popularity of peer-to-peer lending is a direct reflection of the poor performances of major financial institutions in the United Kingdom.

The source noted that while traditional bank loans are not going to disappear, the emergence of other channels that can offer more options to the average small business owner provides the sector with greater flexibility. In a persistently turbulent economic landscape, this agility is crucial to maintaining profit gains and sustaining overall growth over time.

Alternative lenders leveraging technology
Earlier this month, CNBC explained that main street stores are turning to advanced analytics technology to better meet the demands of small business borrowers. According to the news provider, these tactics have improved approval ratings and streamlined the overall process of commercial loan disbursements.

Business owners should always look into every credit source available to them to ensure that they are acquiring the best product for their purposes. These decisions can be better informed through the use of advanced technology, such as data analysis tools, to establish the long-term benefits - or impediments - of a given loan acquisition.