As technology and innovation continue to hurtle us into the future, nearly every aspect of our lives is becoming more streamlined and automated. Those changes, as new and different as they are, have even started to extend into the rigid banking services industry, where some of the world’s leaders in banking have begun using technology to make small-business loans more efficient and effective.
Until recently, business owners were being subjected to mountains of paperwork and weeks of waiting for small loans, all while working to find better ways to service their customers/employees and grow their businesses. But new technology, and competition from Silicon Valley, has forced banks to bring newer, cheaper, and shorter processes to the table.
A recent article in The Wall Street Journal highlighted how one mutual savings bank is even able to approve loans of up to $100,000 for existing customers in less than five minutes. In a test run of their new system, Eastern Bank processed and offered loans to 600 customers. Of the 36 who ultimately accepted their loans, only one has fallen behind on their payments, showing just how reliable these quicker and more advanced screenings can be. Other major banks like J.P. Morgan Chase and Bank of America have closely followed suit, cutting weeks of paperwork and waiting into days.
In a recent survey, the Job Creators Network found that lack of access to capital or credit is one of the principle causes for the stagnation in small-business growth in America. These new changes in the banking industry’s loan processes are evidence that market solutions can provide opportunities to correct that stagnating growth, and as part of our “Bring Small Businesses Back” campaign, we are encouraging policymakers to support innovations and reduce the regulations that can stifle new opportunity.
As the new processes move us into a newer, faster, and more effective world of lending, small businesses will soon have opportunities to grow that they might never have imagined. Those opportunities can only mean better, cheaper, and more efficient goods and services for our country and the world.