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How Online Lenders Use Technology to Approve Business Loans

James Smith

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How Online Lenders Use Technology to Approve Business Loans

Financing Business Online Loan Technology

Technology is more than just a word; it’s a combination of movement of time, things, and events. Technology, while made by humans, does not need us anymore as long as it is plugged in and not infected by inadequate or lousy information.

Technology gives us, on its best day, speed and accuracy, and its worst day, misdirection and confusion. Technology is a game of who’s watching who. So technology needs to be understood and appreciated and used for what it was designed to do, which is to be quicker and more efficient than the traditional flow of information without the internet.

If you are not aware of the trends, technology will sneak up on you. For instance, your personal and business life are not only scheduled through emails and your smartphone, but your life is no longer identified as yours but a mind-meld world of dot com, blockchains, digital wallets, bitcoins, and cryptocurrency.

Imagine budgeting your business financial needs using bitcoins? A competitive business must be ready to meet the brave new world in ways you never thought imaginable.

How Does Technology Change Small Business Lending?

Advances in financial technology changed the way small business owners find business loans and change the way that lenders process and approve loans. Technology changes the way that small business borrowers work with lenders that are not exclusively banks.

  1. Banks sought out borrowers through advertisements waiting for borrowers to fill out loan applications feeling confident that borrowers needed the financial services of banks. This process has remained stable over the last half-century. However, today small business owners find their lending partners online.
  2. Lender Partners may be located thousands of miles away from the borrower.
  3. Online Lending Partners may have options not available to the traditional bank, er.
  4. The Internet, as a research tool, provides the borrower with the opportunity to research options as a filter to find options more appropriate to the specific needs of the borrower to determine the best online to provide the loan.
  5. Online lenders have many data points gleaned from the public record about the borrower to determine the borrower’s creditworthiness other than just the credit score and collateral.
  6. The online application is quick and easy to complete, providing the underwriter the technology to make a sophisticated decision in minutes or less than ten days. Thus, loanry.com “business loans are approved faster”.
  7. The online loan process provides electronic debiting with an automatic withdrawal agreement paid directly from the small business owner’s bank accounts. Thus, sites like this say the borrower can fit a loan payment in their budget.
  8. The online lending process for business loans) fosters a better relationship with the borrower using tools such as emails and updated information about the loans and other options that may develop.

The World of Blockchain, and Financial Transactions

It is challenging to apply the phrase “Let’s keep it simple” to the understanding of blockchain. Blockchain is one way of securing information concerning business transactions forming a database. If there is a transaction between two parties involving a debt, this transaction could be considered one block.

If another party secures the debt, this would be regarded as another block, thus creating a blockchain. If the secured debt is now collateral for a loan, another block is created and added to the chain. The entire blockchain forms a database. If the debt is fully paid off, this now a part of the blockchain.

In the blockchain, all the transactions are secure. In a loan transaction, many parties and data points are created. The information in any blockchain cannot be deleted. If a debt is paid off, the original transaction is not irrelevant.

Blockchain is record-keeping technology. The blockchain keeps track of millions of transactions at the pace of internet speed. Traditional databases and accounting practices are too slow and a burden to customers, which requires expensive fees and long clarification periods. The middleman is removed by using a blockchain-based platform, and there is no need to wait to have a transaction clarified because blockchain offers both security, speed, and reliability.

Conclusion

It’s too late to stop the train because you want to get off. Technology has already surpassed you. The impact of technology and the Internet has irreversibly changed financial transactions. The days of sitting down with your local banker are over, and sitting down with your keyboard and smartphone is the only way to travel in the financial world because loan lenders use blockchain technology.

James Smith is the writer for Munchkin Press. He is a young American writer from California and is currently traveling around the world. He has a passion for helping people and motivates others.

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