A Changing Commercial Lending Environment
In recent years, commercial lending has experienced growth, thanks to an improved economy, low-interest rates, and greater loan options. Together, these have created phenomenal opportunities for both businesses and lenders.
At this same time, the introduction of online and alternative lending options has caused a disruption within the financial industry, as nearly 20 percent of all small businesses sought financing from these types of lenders. (Source: Federal Reserve 2015.)
Oftentimes, small business borrowers are willing to take on the higher interest rates offered by alternative lenders because those lenders have one thing many banks can’t compete with—speed.
Commercial lending can often be bogged down by tedious application processes, sluggish decisioning times, and frequent delays, all of which are drawbacks for businesses seeking funding from traditional banks, lowering their satisfaction and causing them to shop around for a lender that delivers a more convenient, faster source of funding.