The Rise of Online Lending is a new entry in Intuit's Dispatches from the New Economy report series.
It was released in conjunction with an announcement that Intuit and Fundbox are partnering on a new product that allows small businesses a simple way to fix their cash flow by advancing payments for their outstanding invoices within QuickBooks.
According to the press release:
By leveraging QuickBooks data and not requiring a credit check or any paperwork, this new solution delivers faster financing, lowers costs, and puts more money directly in the hands of small businesses.
As the report chart below points out, small business lending is broken. The basic issue is banks are less interested in lending to small businesses than they were in the past.
There are a number of reasons for this - see the report for details - but the big one is due to post Great Recession banking regulations it simply isn't as profitable for banks to lend to small businesses using traditional methods.
Filling in the gap are online vendors of various types. Banks are also starting offer online lending products or partnering with the new online lenders. This, as you can see from the report chart below (click to enlarge), is expected to result in the strong growth of online lending to small businesses in the U.S.
As with prior Dispatches from the New Economy, Emergent Research (that's us) assisted Intuit with this report.
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