Business loan: normal or digital?

Since this week, entrepreneurs have another source of money: Bank has also set up a digital lending club. Via the Fund website, the bank offers loans for smaller entrepreneurs who want to borrow money quickly and easily.

Take out an online loan for entrepreneurs

Take out an online loan for entrepreneurs

Rabo’s step is not unique: ABC Lender the way when it launched the New10 credit site almost two years ago. ING has chosen a different route with a kind of marketplace for SME loans: Funding Options. In addition to the major banks, there are also various independent fintech companies that offer entrepreneurs loans online.

Not entirely digital

Not entirely digital

Incidentally, the credit provision at Fundr does not go entirely online. The largest part is, but in the end there is always a video call in which the Fundr offer is discussed. Rabo says about that: “Business financing is not buying half a tan. Our customers have indicated that they do not like a 100% digital process.”

100% digital process not pleasant?

The latter, I doubt that by the way. I think there are a lot of entrepreneurs who are happy to take out their loan 100% digitally. Anyway, there will be reasons for wanting to talk to the entrepreneur and I understand that.

Can the offer be withdrawn?

I am curious how it works if the account manager gets doubts about the credit during that telephone conversation. An offer has already been made via e-mail, so can the bank return? There is no agreement yet but there is an offer … my estimate is that there will still be a reservation somewhere in or below the offer.

Digital or just business loans

Digital or just business loans

In a while we will probably understand the ‘normal working method’ as the digital working method, that could be. But we are not there yet.

Just borrow for business

The only thing left to do is knock on the door of a bank – you know, with an appointment at a bank branch – and deliver a lot of documents. Those documents are studied extensively by the account manager and then you get an offer – or not.

Digital business credit

It is all much easier and faster digitally. You have to deliver far fewer pieces and know in no time where you stand: how much you can borrow and at what rate.

The requirements are less strict, so you are more likely to be eligible for a loan. Then the money is also super fast on your account, all sounds ideal right?

Online business loans = more expensive

Why would there be another entrepreneur who just goes to his bank to borrow money? Very simple: the online credits are more expensive. The interest and costs are often considerably higher than with a credit through the bank branch.

Fintech lenders are doing well

Nevertheless, the online initiatives are going well: New10 has already provided more than 1,000 business loans in the first two years of its existence. And then New10 is by no means the only lender you can go to as an entrepreneur.

Only rejected applicants?

Will that only be entrepreneurs who were unable to manage at the bank through the normal way? I do not think so. The convenience of online and fast is worth a lot – certainly for an entrepreneur who assumes that he will make more profit quickly with the borrowed money and can therefore repay the credit quickly. He then takes the higher costs to the bargain.

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