April 16, 2015
Small-business owners who need quick access to capital have a burgeoning industry eager to fund them. Business lending through online platforms has grown significantly in the past two years. The tight credit environment in US is also fueling demand.
Emerging online alternative lenders use personal credit history, key metrics about the borrower’s business and also uses predictive modeling, data aggregation, and electronic payment technology to assess the health & performance of a business
While the online market is in the earliest stages of transformation, it is clear that the traditional small business bank lending model has left gaps that, with the help of technology, challengers are finding promising and profitable. Clearly new online entrants present a challenge to established players in the small business lending marketplace. Things started changing in 2007 but grew at slow pace. After the financial crisis, when banks became stricter in lending, alternative lending models started growing at a rapid pace. Small entrepreneurs, who were having a hard time in getting loans from banks, started drifting to online platforms for fast cash.
The online small business lending market is in its infancy. Online platforms in the US have issued loans worth $530 million in 2012, $861 million in 2013 and $2.3 billion in 2014. By 2016, online small business lending in US will reach $5.2 billion.
Traditional banks have been slow to innovate in the space due to tight regulatory scrutiny, their sheer size, and issues with their legacy businesses. But over the years, what has persisted is a loan process built around inefficiencies that drive high costs due to two realities:
GrowthPraxis estimates the potential borrowing amount to be [Hidden]% of $ [Hidden] Billion. Online Platform based Business lending in US is expected to reach around $_ Billion by 2016 and around $ [Hidden] Billion by 2025.
"U.S. Platform based Alternative Lending Market Report 2015" answers the following questions:
1. Why is business lending through platforms disruptive in nature? How will it impact the traditional banking system?
2. How big is the addressable market for business lending through platforms in the U.S.?
3. Who are the players dominating the industry? Is there any room for new players?
4. When should we expect the inflection point in business lending through platforms?
5. How will use of Cloud, Analytics and Mobility in business lending through platforms change the industry?
Table of Contents:
> Automated Small Business lending
Overview of Business Lending through Online Platforms
Market Size of Business Lending through Online Platforms in US
Market Share of Business Lending through Online Platforms – Players in US
Business Lending through Online Platforms – Forecasts in US (2014 -2025)
> Use of Cloud, Analytics and Mobility in Business lending through Online Platforms
> Upcoming regulations in Online Platform-based Business Lending