Most alternative SME lenders have a 24-hour decision-making process, which is ideal for most small businesses that need regular financing and have limited resources for dealing with time-consuming bank lending procedures. P2P platforms and online SME lenders use advanced underwriting algorithms and analyze additional criteria like bank transaction histories, tax filings, credit card histories, invoice volumes, etc., a process that significantly improves the chances of granting loans to SMEs. This way, alternative SME lenders can quickly underwrite small-ticket loans that banks find difficult to service. Such customer-centric processes make alternative SME lenders one of the main parts of the SME lending ecosystem. We recently heard news from the following alternative P2P and online SME lenders:
Funding Circle is the leading P2P platform for business loans in the world. Since Funding Circle’s launch six years ago, investors – individuals, the governmentbacked British Business Bank and a range of financial institutions – have financed more than 15,000 small businesses based in the UK through the Funding Circle platform.
Spotcap is an online SME lender that was founded in 2014 and has its headquarters in Berlin. In the last three months, Spotcap has launched its service in two new markets, the UK and New Zealand, meaning that the company now finances SMEs in five markets in total: Australia, the Netherlands, New Zealand, Spain and the UK. The company has raised more than 63.5 million euros in equity and debt financing and currently serves over 4,000 users in its initial markets: Australia, the Netherlands and Spain. Spotcap has provided more than 50 million euros in financing for SMEs over the past two years.
The American company Biz2Credit announced a new partnership with Tradeshift in February. Tradeshift, which provides eCommerce and eProcurement solutions for SMEs, will integrate Biz2Credit’s lending marketplace into its client offerings. Tradeshift customers will receive financing through the Biz2Credit platform and will be able to apply for a loan without leaving the Tradeshift platform.