Securing funding is a critical step for small businesses looking to start and grow their operations. However, the process can often be daunting, especially when traditional financial institutions are not always built to cater to the needs of small businesses. During the U.S. Chamber of Commerce’s America’s Top Small Business Summit: Ready. Set. Scale., Cory Kampfer, Co-President of Small Business Lending at Enova, shared valuable insights on the small business funding process.
Traditional banks typically favor larger businesses that require substantial loans, leaving small businesses underserved in the funding space. Kampfer highlighted that the cost of underwriting and processing can deter banks from dealing with loans below six or seven figures, leaving small businesses struggling to find suitable funding options. This gap in the market has paved the way for online lenders, particularly those specializing in serving small businesses, to step in and meet the needs of growing companies.
Enova, for example, offers small business loans ranging from $5,000 to $250,000, with an average loan size of around $50,000. By providing an online application process that can be completed after business hours and quick decisions with funding as soon as the next day, online lenders like Enova offer convenience and efficiency to small business owners. This accessibility is crucial for Main Street businesses, such as dentist offices or hardware stores, that may not have the time or resources to navigate the traditional lending process.
One of the key advantages of online small business lending is the expedited approval process. Kampfer pointed out that traditional funding methods can consume 26 hours of a business owner’s time over several weeks, whereas online lending allows for quick decisions within minutes. This speed is essential for busy small business owners who require immediate funding and cannot afford to wait for extended periods.
Transparency is another crucial aspect of the online lending process. Kampfer emphasized the importance of lenders providing clear and comprehensive information about loan terms and guiding applicants through the process. By offering transparency and disclosure upfront, small business owners can make informed decisions about their funding options and secure the necessary resources to support their businesses’ growth.
In conclusion, the landscape of small business funding is evolving, with online lenders playing a vital role in providing accessible and efficient funding solutions for growing companies. By leveraging online lending platforms, small business owners can streamline the funding process, receive quick decisions, and access the capital needed to start, run, and expand their businesses. With transparency and clear communication, entrepreneurs can navigate the online lending landscape with confidence and secure the financial support necessary for their business endeavors.
